Cash & Corona - What You Should Know
May 12, 2020
If you have been financially affected by the pandemic it is important to know you have options. Learn about tools to help you stretch your dollar a bit further and resources that can provide relief.
If you have an emergency fund this is the time to use it. Also, review the 50-30-20 budget described below.
% of take-home pay
- 50%: toward needs such as groceries, mortgage/rent
- 30%: wants (eating out, online shopping)
- 20%: debt payments & savings
Closely review the 30% wants category. This is the area you will be able to cut back on while still providing for you and your families basic needs without affecting your credit score.
Prioritize Expenses & Ask for Help If Needed
List your bills in order of importance and be sure to pay the ones at the top of that list (rent/mortgage). If you cannot make payments, reach out to your lender or credit card company directly. Many companies are offering leniency due to COVID-19. American Express is waiving interest and late payment fees for eligible personal and business cardholders. SunMark is handling assistance on a case by case basis. A customer service representative or personal banker would be happy to speak with you about any relief requests.
If you have had payment interruptions and you are now unable to pay your mortgage there are mortgage relief options available to you. The C.A.R.E.S Act provides protection for homeowners who have federally backed mortgages in 2 ways
- Your home may not be foreclosed on for 60 days after March 18, 2020
- You have the right to request a forbearance for up to 180 days. You also have the right to request an extension for up to another 180 days. You must contact your loan servicer to request this forbearance.
If you do not have a federally backed mortgage there are still relief options available to you. Contact your loan servicer directly to find out what resources there are.
Credit Card Debt
You have several options to give yourself some relief from your credit card debt.
- Transfer debt to a balance transfer card with a 0% interest rate. These balance transfer cards generally include a promotional period of up to 1 year of no interest. It is important to note that to qualify for these cards, they often require a better than average credit score and many charges a 3%5% fee of the total transferred balance. Be sure to pay these off before the interest is reinstated.
- Consolidate multiple debts into one payment with a personal loan. These typically have a lower interest rate than what credit card companies charge.
- List debt from highest to lowest interest rates and make the minimum payment on them all. The bottom line is that it is better to do something rather than nothing.
Long Term Investors
Word from the wise “Do not flee the store because everything is on sale”. You may have had an initial instinct to stop the bleeding and get out while you can, but experts are saying the exact opposite. The best reaction is no reaction. Keep your current investments and work to re-balance your portfolio. This advice also applies to those approaching retirement. You do not stop investing just because you’re retiring and hopefully you have some cash stashed away in a less volatile place such as a saving account or bonds.
It is important to remember that you are not alone, and many others are experiencing very similar hardships. Look to you neighbors, local communities, civic organization, and governments for relief options. SunMark Community Bank continues to support all of our customers and is here to, please give us a call with any questions or concerns at 478-551-2424.