Editor's note: this article was updated on Apr. 23, 2020.
COVID-19 has taken over our newsfeeds, group chats, and thoughts. Chances are it’s also impacting what your office looks like (hint: it might feature your bed), how your investments are doing, and eventually the interest rates on your savings and loans. That’s a lot to keep up with. So we Skimm’d answers to some of the biggest money questions on your mind right now.
How is the coronavirus impacting the job market?
More than 26 million people have filed for unemployment since mid-March. Economists think millions more are in a vulnerable position. The good news is that the US Dept of Labor has loosened typical eligibility requirements so more people qualify for benefits. Think: part-time, contract, and freelance workers. They’ve also added another $600 to weekly unemployment checks through July 31. Check your state’s labor website for more info.
What’s the deal with stimulus checks?
You might’ve already gotten your money. If not, the IRS launched a tool where you can check the status of your payment and update direct deposit info. Reminder: you should get $1,200 if you made less than $75,000 in 2019 (or 2018 if you haven’t filed taxes this year). Plus $500 for each kid under 17. The amount phases out the more you make, and you won’t qualify for anything if you earn more than $99,000.
If you got less money than you were expecting, look out for a follow-up notice from the IRS. They’re sending these to everyone to confirm you got what you were supposed to. Once you get your letter, call and let them know if they made a mistake.
Will I have to pay it back?
Nope. This one-time payment will not affect your 2019 or 2020 tax refund. And unlike unemployment benefits, you won’t have to pay income tax on it. If you get a sketchy email, call or text asking for your bank info or to pay back some of the money, it’s probably a scam.
Do I have to keep up with my student loan payments?
Not if Uncle Sam’s your lender. The Dept of Education has placed federal student loan borrowers in “administrative forbearance” until September 30. You can still make payments, but there’s no penalty if you don’t. And 100% of your payment will go toward the loan principal. So you could (eventually) get out of debt faster.
PS: if you’re working toward student debt forgiveness, like through the Public Service Loan Forgiveness program, skipping payments during this time won’t get you off track – provided you meet the rest of the program’s requirements.
Could I get a break on other payments, too?
Call and ask. Some financial institutions (think: JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs) have said they’ll waive fees, increase spending limits, and maybe even defer loan payments for those affected by the coronavirus. Service providers are also being more flexible than usual, and you might be able to negotiate your utility, cable, Internet, and cell phone bills.
Related: How to Be a Better Negotiator
Should I worry about the stock market?
Things have been extra bumpy lately, and there’s no way to know for sure what stocks will do next. If you were planning to invest for the long-term (think: years or even decades), try to keep calm and carry on with your regular investing strategy. The US stock market has recovered from every major downturn in history. And kept on climbing.
I heard the stimulus bill made it easier to take money out of your 401(k). Is that a good idea?
Since your retirement fund is meant for future you, withdrawing money early normally means you have to pay a 10% penalty and regular income taxes. The CARES Act got rid of that penalty and extended the timeline for paying the tax bill. But tapping this money should still be a last resort. That’s because money you invest today has a chance to grow a LOT by the time you retire, thanks to compounding returns – or when your money starts making money of its own.
Should I invest more since stock prices have dropped?
The whole idea of investing is to buy when prices are low and sell when they’re high. So, in theory, buying the dip could be smart. But make sure your emergency fund is looking good and you don’t need money for something more immediate (hi, credit card debt) before investing more.
Is it a good time to refinance my mortgage?
In March, the Fed cut the federal funds rate (a benchmark percentage that influences mortgage rates) to almost zero. That normally means you can score a great deal on mortgage rates. But nothing is normal right now. Rates can vary depending on the day and the lender. Do your homework before signing on the dotted line.
What about buying a home?
If you were already working toward this goal, and you think your wallet can handle it, you don’t necessarily need to wait to make your homeownership dreams come true. Low interest rates can help you get a good deal. And sellers may be more motivated to negotiate if the pandemic slows demand.
Just know that the process is taking longer than usual. Because things like home inspections and getting stuff notarized are harder to arrange these days. Plus, some lenders are getting pickier about who they do business with.
When do I need to file my taxes?
The gov has pushed Tax Day back to July 15, so you don’t need to file your federal return before then. But if you’re expecting a refund, you might want to file sooner rather than later. Because, money.
Will I get my money back if I cancel travel plans?
Many airlines, hotels, car rental companies, and tour providers are being more flexible than usual with their change and cancellation policies. If your flight is canceled, a refund’s probably coming. For everything else, it varies. Call and see what you can negotiate. Prepare for a few hours of hold music.
What if I bought travel insurance?
Standard travel insurance might cover you if you get laid off, summoned for jury duty, or sick. But not if you’re worried about getting sick or following social-distancing orders. If you bought a more expensive, “cancel for any reason” insurance policy, you’re likely entitled to (most of) your money back.
What do I do if my wedding is coming up?
The CDC is probably raining on your day....and not in the ‘good luck’ kind of way. They advise against gathering in groups of more than 50 until at least May. Meaning it may be time to start un-planning.
Venues and vendors are likely willing to work with you on a Plan B. Get everything in writing, and understand the conditions of changed contracts before you make any additional deposits. And tell your guests ASAP so they can adjust their own plans.
What can I do to protect myself financially?
Save as much as you can in your emergency fund. If you’re spending less money on entertainment, travel, and eating out while you’re at home, put that into savings. Then look for other ways to save even more. We’ve got some ideas here.
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