The world is on pause. For many people, their income has paused with it. A record 17 million Americans and counting have applied for unemployment, with last week’s high being a record 6.6. million. Some people have no idea how they are going to survive if the COVID-19 coronavirus is not contained soon.
Teri Williams is the President and Chief Operating Officer of OneUnited Bank, the nation’s largest Black-owned bank. She wanted to use her expertise to give others insight on how to take care of their finances in an economy that requires social distancing. Below are Williams’ “5 Tips to Navigate the COVID-19 Economy.”
The impact of the Coronavirus pandemic on the economy has not been fully realized and no one knows how long it will last. Yes, many businesses have temporarily closed, many flights and cruises have been cancelled and many athletic and cultural events postponed or cancelled. Yet, we have not seen massive layoffs. We will certainly experience higher unemployment and job loss.
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It is important to think defensively right now. This may seem obvious, but now is not the time to make a major career move. Maintain your sources of income, including your employment. Job stability will help you weather this storm with its unpredictable end. There’s a cliché in the Black community – last hired, first fired! Don’t trade your seniority in your current job for a new job unless necessary for your mental well-being.
If you have already lost your job or your business has been temporarily closed, the Federal Government has put a sturdy stimulus package in place that can ease the burden. For the first time unemployment insurance is available to independent contractors, like Uber of Lyft drivers or hair care workers. Get the facts here.
Savings is also more important than ever! Whether you have or have not been impacted by the Coronavirus today, it’s always a good idea to start saving for tomorrow…now! Identify opportunities to save money by shedding unnecessary expenses (like having more than one streaming video service – Netflix or Hulu? Pick one.) And there are many great online automatic savings tools.
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Jamarlin goes solo to discuss the COVID-19 crisis. He talks about the failed leadership of Trump, Andrew Cuomo, CDC Director Robert Redfield, Surgeon General Jerome Adams, and New York Mayor de Blasio.
Who knew there was such a thing as essential businesses? If you have unfortunately lost your job, explore employment in essential businesses, many of which are experiencing higher demand and sales requiring tens of thousands of jobs to become immediately available. These businesses include supermarkets, convenience stores, warehouses, banks, credit unions, office supply stores and other businesses that supply products needed for people to work from home. Also explore companies that are offering online services, such as educational services to families who are now home schooling their children. The essential business designation varies by state, so check yours.
If you have been hesitant to use online services – speaking directly to parents and grandparents – get with the program!
With the need for social distancing, online services provide great resources from the comfort of your home. You can use video conferencing services to connect with family members just like the Jetsons! So many services are available from the convenience of your laptop or phone, like free streaming services that provide great home entertainment or Instacart for groceries and Uber Eats or Door Dash for food delivery. You can also bank online including paying bills and setting up direct deposit of your payroll or social security check. You can even get paid up to 2 days early with direct deposit and use many online services to transfer money such as CashApp, Venmo or Zelle.
Do not put your head in the sand when it comes to your bills. If you find yourself unemployed or with less income, contact your creditors and begin negotiating immediately. Putting this important task off will only increase your stress and anxiety, for no good reason.
Creditors know they cannot get water out of a stone. Push creditors to develop a loan modification plan to meet your current financial condition. By being in constant communications and negotiating with your creditor, you can avoid penalties and minimize the negative impact on your credit score. It is better to be proactive than ignore your creditors. Remember, millions of other Americans are in your same situation and the creditors understand that.
There are many new programs to provide mortgage relief and forbearance by Fannie Mae, Freddie Mac and other mortgage providers. Contact your lender for a loan modification if you have been impacted by the Coronavirus pandemic.
Despite the Federal Reserve decreasing the benchmark rate to zero, mortgage rates have increased. The reason is that higher government debt to finance programs to address the Coronavirus have forced up mortgage rates. Additionally, banks are backlogged with refinance applications. And lenders are very concerned about credit quality and the stability of borrowers’ future income. The result of a tighter mortgage market is that homes may decline in value. With fewer pre-approved borrowers competing for homes, sellers may be more willing to reduce their asking price and homes may become more affordable. So, explore the housing market patiently and be ready to act if home values decline.