From credit card tricks to rent strategies, here's how to get — and stay — in control when your finances feel, um, F'd.

By Marisa Casciano
Apr 09, 2020 @ 2:30 pm
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Photo Illustration/INSTYLE.COM, Photos: Getty Images

The coronavirus pandemic has many people navigating uncharted and uncertain territory, including unemployment. It has completely washed the globe of any sort of routine, and left many of us fearfully asking, “What now?” Will our careers be dismantled? Will we receive our next paycheck? Will we be able to cover rent and groceries this month if we’re laid off or furloughed?

Fears of looming unemployment are valid. Nearly 50% of companies in the U.S. are currently considering layoffs, according to a recent online survey released by Challenger, Gray, & Christmas, an executive placement firm. As of the end of March, about 44% of American adults said their personal lives had changed in a major way because of the coronavirus in a study from the Pew Research Center. And while you can’t prevent or predict what the future may hold, you can be as prepared as possible for what may come.

Darcy DiModugno is a part-time retail associate for a nationwide clothing brand and nanny from New Jersey. Her entire team was temporarily furloughed, or required to take a leave of absence, due to orders from state officials to close the store, as it wasn’t an essential business. They would receive their average pay for the following two weeks, and then be able to collect unemployment with a promise from their district manager that they could return to their jobs, should business go back to normal. “I could tell that the company was doing what they could to protect themselves financially, but still do right by its employees,” she tells InStyle. As for her nanny job, she was asked to self-quarantine for two weeks and then see how the situation unfolded from there.

Even though she feels “lucky” and recognizes there are people worse off, she’s still deeply worried. She has personal bills to pay and is attempting to tackle fears about what the world will be like after a life-altering pandemic.

For a model like Amanda Sloan, the future “is not as black-and-white” as getting temporarily furloughed. The nature of her job is already inconsistent, like that of other gig workers. Castings can be competitive and the coronavirus’s impact on her industry makes any paycheck seemingly far gone. Sloan expects to pick up modeling jobs once everything passes, but says “the toughest part about this is the lack of a definite timeline.” She’s able to fall back on her savings account for now, but “this is not sustainable for an undefined period of time,” she says.

The truth is, most people don’t plan for a global pandemic that will rock every aspect of their life. Being laid off or furloughed isn’t part of anyone’s “five-year plan,” but that doesn’t mean you can’t plan for it. Below, guidance on getting through the worst, from deferring credit card payments to enrolling in a marketplace health insurance plan. Here’s what you need to know.

How will I pay my rent?

Let’s talk about rent first. As of April 2020, the median rent price for a one bedroom apartment in the United States is $1,221, according to recent data from Zumper. Take into account your second bedroom or a hot location like New York City or San Francisco, and this number skyrockets. If you’ve been laid off or furloughed, your instinct may be to text your landlord or consider moving out. Take a deep breath, because there are other options.

For example, the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion relief bill with a myriad of goals including delivering a stimulus check straight to your bank account, was just passed by Congress on Mar. 27. Under this act, eligible American adults will receive $1,200 to cover their expenses, and an additional $500 for qualifying children 16 and under. There are a few catches: This is currently a one-time payout, college students will not receive it if they’re claimed by a parent or guardian, and the Internal Revenue Service (IRS) needs to have your information in order to directly deposit the money into your account. (If you recently filed a tax return, you should be fine.)

In addition, if your adjusted gross income as an individual is above $75,000, or as a married couple with no children is above $150,000, you won’t get the full amount. Any taxpayer who files as the head of their household will receive the check in-full if their earnings are $112,500 or less. Payments are expected to drop around April 17, with paper checks taking longer to arrive.

If you’re eligible, this check could cover your rent or a decent chunk of it. However, if you’re trying to create a sustainable financial situation like Sloan or need immediate relief, open your banking apps and strategize. Ginita Wall, a CPA and CFP based in San Diego, and director of the non-profit education website WIFE.org, says to make a list of your upcoming bills and “go on a spending diet.” Cut out what you can — such as subscriptions, memberships, and online shopping trips — and then challenge yourself to cut more. This can ease your mind and put you in a powerful position.

“Don’t worry in the dark,” says Wall. “See if you have enough, and if you don’t, figure out what to do about it.” She says you can fill the gaps by deferring your rent — giving your landlord a written notice of your situation ahead of time, jotting down an agreed-upon rental-deferment plan, and effectively pushing your bill to a later due date — or borrowing out cash from your credit card or against your 401(k). Just research fees and your available credit, and prepare for a potential hit to your finances during tax season before doing so.

How can I defer a credit card payment?

Deferring your credit card payment can take something off your plate, or buy you time to find a new source of income. Although you’ll be responsible for your balance in the future, Stacy Francis, President and CEO of wealth management firm Francis Financial, suggests calling up your credit card company to discuss delaying payments, to temporarily alleviate your financial stress. . Some companies are lengthening their payment deadlines, lowering APR rates, or waiving late fees due to the coronavirus. Bank of America, for example, is allowing customers to request a deferral online, and TD Bank is asking their customers to call to waive fees and defer payments for mortgages, loans, and credit cards — just to name a few. Take advantage of these resources, even if it means listening to lots of “hold” music when you pick up the phone.

How can I get health insurance?

Losing your health insurance during a global pandemic is pretty anxiety-inducing, but your situation isn’t hopeless. If you were laid off or furloughed, Wall says you may still be covered by your employer under COBRA, a set of federal rules designed for workers who are facing job loss. She says you can continue your coverage at a slightly higher price than what you were already paying through regular payroll deductions. Contact your employer’s human resources department for specific information and to start comparing numbers.

That said, according to NPR, the COBRA plan requires you to pay monthly premiums in full. So “you may get more reasonable coverage through one of the marketplace plans,” advises Wall. To opt for a marketplace plan, go to Healthcare.gov or your state’s website. States like Connecticut are offering special enrollment periods to ensure their citizens are safe, healthy, and insured.

How can I manage the changes to my 401(k)?

When it comes to your 401(k) knowing the “right” thing to do may be tricky. Do you drain your retirement fund, or leave it alone and see where the market goes? Sloan isn’t excited at the idea of blowing her savings account, and feels like it’s a major setback. “Back to square one,” she says with a slight laugh.

Francis stresses the importance of not beating yourself up for this downturn in your personal economy right now, and to instead look at your long-term goals. “What’s important to know are your goals and your risk tolerance,” she says, and advises to stay on-course with your 401(k) and remember your investment will likely outlive any terrible turns in the market.

Wall doesn’t advise touching your 401(k) either, but says if you lose your job to stop funding it and assume it’s temporary. “Don’t get used to this. Go back to funding once this is over,” she says. You need maximum cash flow in the immediate. “You can make catch-up contributions later on.”

Are there any programs, like unemployment, I can enroll in?

Under the CARES Act, unemployment benefits have been expanded, giving eligible workers who apply an extra $600 per week from the federal government in addition to individual state benefits, according to The New York Times. The act also gives small business owners and solo entrepreneurs additional funding, and waives automatic student loan payments until Sept. 30, with suspensions being retroactive to Mar. 13 — measures that are also being taken by many state governments. Get your name on the waitlist soon. The number of people changing their employment status to “unemployed” is growing daily — more than 6.6 million Americans applied for unemployment in the last week of March, according to The Washington Post. As Francis puts it, the demand is “significant.”

Can I get another job right now?

When DiModugno was on the conference call with her district manager, she says he made it “abundantly clear” that this situation was temporary. Once stores are allowed to re-open, every employee was told they'd “be able to go back to work as if nothing happened.” But what if you’re in the same situation and would like to pick up another position in the meantime?

As essential businesses are experiencing higher demand than ever, getting another job at your local grocery store, running deliveries for a restaurant, educating people online, or finding remote work is entirely possible right now. According to CNBC.com, picking up another job may affect your eligibility for unemployment though. Keep this in mind before searching the web for digital “help wanted” signs.

Is there anything else I can do? 

So, you’ve done everything you can, from applying for unemployment to collecting your government-funded check. Pull out your budget again and see how you can change it to reflect your new, or potentially upcoming, needs.

Francis says that “by age 70, 96% of Americans will experience four or more major financial life events that will result in a decrease in at least 10% of their income, according to a 2017 study commissioned by the National Endowment for Financial Education.” Coronavirus may be the start of your first downturn, or your third. Either way, learning to survive now will help you thrive later on.

“Use your quarantine to reflect on how you spend your money and take advantage of this extra time at home to better understand your cash flow,” says Francis. She encourages you to look at your spending habits over January, February, and March. Wall agrees, saying to “read anything about money” or find podcast episodes about the topic to acclimate yourself to “the world of money.” (We love The Clever Girls Know Podcast, Ladies Get Paid, and You Are a Badass at Making Money: Master the Mindset of Wealth by Jen Sincero.)

Losing your job can feel like the end of the world. Take a deep breath, surround yourself with resources. The strange days may pave the way for a successful future. 

The coronavirus pandemic is unfolding in real time, and guidelines change by the minute. We promise to give you the latest information at time of publishing, but please refer to the CDC and WHO for updates.