How do I pay my bills during the Coronavirus shutdown!?

How do I pay my bills during the Coronavirus shutdown!?

Dear Friends,
We are in unprecedented times, that’s for sure! I wanted to share some thoughts on covering bills during these times.

Hopefully, with our stay-at-home orders, our expenses are down. Now we’re down to basic needs – housing, food, electricity & water.

I understand for many, your income may be down as well. Hopefully, you’ve prepared for emergencies and have a little savings to get through. Be sure to apply for unemployment or whatever assistance is available, learn about what’s available here. When your stimulus funds come in be sure to apply those to your bills and save the rest. This is definitely not the time to splurge.

You may want to first contact your auto loan companies, it’s my understanding they are willing to pause payments for 60-90+ days with no penalties. Be sure to ask about interest. In all likelihood, interest will continue to accrue and payments will be extended at the end of the term, for example, if you would have had it paid off in 12 months, they’ll tack on the paused payments at the end and it will now take 15 months to pay it off. That’s a best-case scenario so be sure to ask about all terms and consequences to this option.

Water & electricity – municipalities are not permitted to shut off service but that’s just temporary. Pay as much as you can to ensure you don’t get too far behind. It will catch up with you in a few months, so don’t let this bill get out of control.

Renters – rent is one of the highest priorities. Although courts are closed and evictions are halted, that won’t last forever. Do your very best to pay your rent! If you can’t pay in full contact your landlord with a payment plan and do everything you possibly can to pay within the 30 day period. If you get behind it can snowball quickly and being it’s likely one of your highest expenses, it’s next to impossible to catch up once your 30, 60 or 90 days behind. And where will you go if you’re evicted when the courts open again. Make rent your absolute highest priority!

Homeowners – there’s a little more leeway if you own your home but similar to rent, your mortgage is likely your highest monthly expense. Pay it if at all possible. As far as forbearance, what I’ve seen companies doing is forbearing payments for 120 days but then on the 4th month, a balloon payment of all 4 months is due. Rather than $2,000 a month, you’ll owe $8,000 on the 4th month. Obviously this isn’t much help. Again, pay it if at all possible or talk to your lender about options and make sure you thoroughly understand the long term consequences. Talk to a trusted friend, parent or advisor before committing to anything.

Credit cards – call your creditors and ask for deferred payments. Be sure to read the fine print, are they going to report late pays and damage your credit? What are the fees and penalties associated with deferring?

Cell phone, cable, internet – this is our lifeline right now so you’ll want to do your best to keep these services on. Talk you your providers about options and how you can reduce costs. Maybe cut cable and keep Netflix. Or reduce data plans since you’re home on wifi. Get creative and see what relief providers are offering.

As part of the CARES Act passed last week, some of the strictest rules about taking money out of your 401(k) are being temporarily lifted to help people affected by the coronavirus pandemic. It sounds awfully tempting…just consider the long term effects. Read the article

Most importantly, keep the long game in mind. This is a major situation today and for a few months to come but don’t let today’s emergency derail your long term goals. What you do today can affect you for months and years. Tighten your belt and try to cut costs where you can. Pay your rent and mortgage if, at all possible, that snowball will get out of control very quickly. Pay as much as you can on other bills to keep them manageable. Take advantage of assistance where available. We will get through this and come out stronger on the other side.

Hopefully, this is a great lesson to always have an emergency fund. We never imagined something like this could happen. Once it all blows over I’d encourage you to make sure you are prepared for the next emergency. Here’s a simple savings plan, I hope you’ll take advantage of something like it when you’re back on your feet and keep in mind anything can happen and we’ve got to be prepared.

Stay well! Physically, mentally, emotionally and financially.

Blessings, Deanna Parnell

Disclaimer: I am a Realtor with a decent amount of life experience but I am not an attorney, financial advisor or your mother. You are welcome to think of me as a wise older sister 😉 hope this info helps.

Be well ❤