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  • Janet Cruz

Check In With Your Cash In Times Of Financial Disruption.


Early into the year 2020, we witnessed the emergence of a new coronavirus first identified in Wuhan, China. COVID-19, the disease caused by the SARS-CoV-2 coronavirus has now been said to have spread across the globe, bringing with it not only threats to public health and safety, but also triggering fears of a global recession. Every economic disruption is a great time to go back to the drawing board and look for opportunities to course correct. Staying informed on what your cash is doing during these uncertain times can help you make more informed money moves that can safeguard your own, as well as your loved one's financial future. Here are some things that are currently happening when it comes to our cash:


INTEREST RATE CUTS.

On March 3rd, the Federal Reserve cut interest rates by half a percentage in an attempt to stimulate an economy that has seemingly been ravaged by the coronavirus pandemic. By making borrowing money as cheap as possible, the central bank hopes businesses and individuals will have access to nearly interest-free cash to invest and spend. The Fed’s interest rate cut means that banks and other lenders will lower interest rates to entice borrowers and jump-start spending. If you earn interest from a savings account, this cut will most likely adversely affect how much interest you’re making back. With interest rates at an all-time low, many are taking this opportunity to refinance mortgage, car, and student loans. Here are a few articles that I found helpful:

When (and When Not) to Refinance Your Mortgage

How Fed Rate Changes Affect Your Student Loans



WALL STREET

With Wall Street experiencing one of it's ugliest weeks, the Dow Jones Industrial Average and the S&P 500 both entered bear market territory and the Dow recorded its biggest one-day drop. Big drops on Wall Street mean smaller balances in your 401(k) or personal investments. Historically, the market does have a record of bouncing back, but taking this time to figure out when you’re going to need your money, whether or not it will be there when you need it, or where else your money might perform better can all prove beneficial.


CLOSURES + QUARANTINES

With stores, businesses and schools all closing and industry and sporting events being canceled, employees, freelancers and business owners alike are all having to now bear the burden of temporary layoffs, isolation and quarantine. Luckily, local and Federal entities have mobilized and are ready to help you through this difficult time.


Here is a list of resources designed to provide information for those that have been affected during these volatile times. Some are geography-specific since I am based out of California, but I hope that by listing them, I might be able to steer you in the right direction towards finding equivalent programs and entities in your own home state. Feel free to comment and share any additional tools or programs you might know of too!


IF YOU ARE OUT OF WORK.

California's Employment Development Department (EDD) provides a variety of support services to individuals affected by COVID-19 in California: Disability Insurance: If you're unable to work due to having or being exposed to COVID-19 (certified by a medical professional), you can file a Disability Insurance (DI) claim. DI provides short-term benefit payments to eligible workers who have a full or partial loss of wages due to a non-work-related illness, injury, or pregnancy. Benefit amounts are approximately 60-70 percent of wages (depending on income) and range from $50-$1,300 a week. How to file a disability claim Paid Family Leave: If you're unable to work because you are caring for an ill or quarantined family member with COVID-19 (certified by a medical professional), you can file a Paid Family Leave (PFL) claim. PFL provides up to six weeks of benefit payments to eligible workers who have a full or partial loss of wages because they need time off work to care for a seriously ill family member or to bond with a new child. Benefit amounts are approximately 60-70 percent of wages (depending on income) and range from $50-$1,300 a week. How to file a PFL claim Unemployment Claim: If your employer has reduced your hours or shut down operations due to COVID-19, you can file an Unemployment Insurance (UI) claim. UI provides partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own. Workers who are temporarily unemployed due to COVID-19 and expected to return to work with their employer within a few weeks are not required to actively seek work each week. However, they must remain able and available and ready to work during their unemployment for each week of benefits claimed and meet all other eligibility criteria. Eligible individuals can receive benefits that range from $40-$450 per week. How to file an unemployment claim Federal Unemployment Assistance: The Department of Labor gave states leeway to amend their laws so people impacted by COVID-19 could get unemployment insurance: Under the guidance, federal law permits significant flexibility for states to amend their laws to provide UI benefits in multiple scenarios related to COVID-19. For example, federal law allows states to pay benefits where: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. More details on the Department of Labor's website.


BANK & CREDIT CARD RELIEF.

For those of us carrying balances on our credit cards, interest rates on our debt will be lower soon making our debt slightly cheaper. The adjusted rate should change automatically in one or two billing cycles, but make sure to keep an eye out to make sure the change has been made. If you are struggling to make payments all together, it is worth trying to establish a line of communication with your banks and lenders to see if there is anything they can do to help you in your individual situation. Here are some links that might be useful if you bank with any of these banks:


Citibank: They are waiving monthly service fees and penalties for early CD withdrawal for retail bank customers.They are also providing fee waivers on monthly service fees, remote deposit capture, and penalties for early CD withdrawal. They also have assistance programs for eligible credit card customers including credit line increases and collection forbearance programs and for eligible Mortgage Customers. PNC Bank: They released the following statement: "We stand ready to work with those experiencing financial difficulty as a result, and we are taking the necessary steps to avoid potential disruptions of service to our customers. PNC is prepared to offer assistance, as needed, to impacted customers through a range of measures." They are urging customers to call them at 1-888-762-2265 (7 a.m. - 10 p.m. ET Monday - Friday; 8 a.m. - 5 p.m. ET Saturday & Sunday). Wells Fargo: The bank says they will help customers experiencing financial hardships as a result of COVID-19: "If in need of assistance, we encourage customers to call us at 1-800-219-9739 to speak with a trained specialist to discuss options available for their consumer lending, small business and deposit products."


GIG ECONOMY RELIEF.

Uber: The company is offering 14 days of financial assistance to any driver who is diagnosed with COVID-19 or is quarantined: "Any driver or delivery person who is diagnosed with COVID-19 or is individually asked to self-isolate by a public health authority will receive financial assistance for up to 14 days while their account is on hold. We've already helped drivers in some affected areas, and we're working to quickly implement this worldwide." Lyft: The company also said it would provide financial help for drivers impacted by the virus: "We will provide funds to drivers should they be diagnosed with COVID-19 or put under individual quarantine by a public health agency. This helps support drivers financially when they can't drive, while also protecting our riders' health." The company said it would also temporarily suspend drivers and riders who are diagnosed with COVID-19 from using Lyft until they are medically cleared. Postmates: For delivery workers, Postmates created a fund that will credit Postmates for the costs of doctors appointments and medical expenses related to COVID-19's impact in over 22 states. They are also waiving restaurant commission fees for new merchants that want to use the service to make up for people not coming into their restaurants. Doordash: The delivery company is offering up to "two weeks of assistance to Dashers and Caviar couriers who are diagnosed with COVID-19 or who are subject to quarantine at the direction of public health officials." Instacart: The company announced an expanded sick-time policy in light of COVID-19: "In addition to sick pay for all in-store shoppers nationally, we're also offering additional support for all part-time employees and full-service shoppers affected by COVID-19. We will offer up to 14 days of pay for any part-time employee or full-service shopper who is diagnosed with COVID-19 or placed in mandatory isolation or quarantine, as directed by a local, state, or public health authority. This assistance will be available for 30 days to ensure our community is supported during this rapidly evolving situation, and we'll be sending more information to shoppers in the coming days."


FEDERAL GOVERNMENT.

Internal Revenue Service (IRS) — The Treasury Department and IRS just announced a three-month delay for any tax payments owed up to $1 million. You’ll still need to file your returns by April 15, 2020 but will have until July 15 to pay. This will apply to individual tax returns but should also cover many pass-through entities and small businesses.

Small Business Administration (SBA) — The Coronavirus Small Business Guidance & Loan Resources page is being continually updated with all SBA tools and resources, including preparedness checklists and different avenues to access capital.

Small Business Administration Economic Injury Disaster Loans — Designated areas are eligible for working capital loans up to $2 million. Interest rates are 3.75% for small business and 2.75% for non-profits, with long-term repayments up to a maximum of 30 years. You can apply online or call the SBA disaster assistance customer service center at 1-800-659-2955.


STATE/LOCAL GOVERNMENTS.

  1. California — Employers facing potential closures or layoffs can request America’s Job Center of California Rapid Response Services for help in evaluating your business and employee situation. Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the state’s Employment Development Department (EDD) to file their state payroll reports and/or deposit state payroll taxes without penalty or interest.

  2. New York City — The NYC Small Business Services is offering grants and zero-interest loans to businesses in specific categories of size and revenue impact. Businesses with fewer than 100 employees who have seen sales decrease by 25% or more will be eligible for zero-interest loans of up to $75,000 to help mitigate losses. The city is also offering small businesses with fewer than 5 employees a grant to cover 40% of payroll costs for two months to help retain employees.

  3. Pennsylvania — The Pennsylvania Department of Community and Economic Development has put together a COVID-19 Business Resource guide that appears to be updated almost daily. There’s a list of contacts and resources that are available to assist affected businesses.

  4. San Francisco — The city’s Office of Economic and Workforce Development has a comprehensive list of resources and updated information for business owners in the bay area. The city is rapidly instituting programs to help business owners.

  5. Seattle — The SeattleMet has an excellent list of resources for small business owners and employees in the metro area. Grants of up to $10,000 are available for businesses that make 80 percent (or less) of the area’s media income and have five or fewer employees. The business and occupation tax deadline has been extended, and there are deferred payment plans for utilities. There are plenty of other programs currently available in and around what is (at this point) the hardest-hit city in the U.S.


STAYING CONNECTED.

In response to the COVID-19 pandemic, and the challenges that many Americans will face in the coming months, FCC Chairman Ajit Pai recently announced the Keep Americans Connected Initiative. In order to ensure that Americans do not lose their broadband or telephone connectivity as a result of these exceptional circumstances, he specifically asked broadband and telephone service providers, and trade associations, to take the Keep Americans Connected Pledge. So far, over 200 companies and associations have signed the Chairman's pledge to Keep American Connected. Click here to learn more about the initiative.


GET A FINANCIAL BEST FRIEND

In my quest to learn money, the Universe brought me a woman who has been one of my most trusted money mentors, Priscilla Land. If you haven't checked out, Why You Need A Financial Best Friend With Priscilla Land on the Latina Money podcast, I encourage you to do it ASAP! There has never been a more critical time to learn what options you have when it comes to your money. Each and every single day, hardworking people are faithfully pumping their hard-earned cash into 401(k)s and pension plans only to find out that they've lost thousands of dollars in retirement funds due to stock market fluctuations. Connect with a trusted financial best friend that can show you how to ensure that your money will be safeguarded for when you need it most. If you don't currently have a Financial BFF, Priscilla is my top choice. With her permission, here is her contact info: (708) 566-0661

Call or text and tell her Janet from Latina Money sent you!


KNOW MONEY

There is tremendous power in learning how money works and how you can make it work for you. To wrap up this very long post, I'll leave you with a couple of resources that I found helpful to gain a greater perspective during these chaotic times:


YOUTUBE VIDEOS

Jake Ducey

CORONAVIRUS RESPONSE: What I'm Doing To Prepare For Worst Case Scenarios...


Robert Kiyosaki

3 Steps to Survive THIS Market Crash


BOOKS

The Creature From Jekyll Island - A Second Look At The Federal Reserve

AUDIO BOOK

The Creature From Jekyll Island - A Second Look At The Federal Reserve

BOOK

Rich Dad, Poor Dad




Remember that no matter how dire circumstance may look at face value, for every crisis lies an opportunity, depending on how it is looked at. If you have been fortunate enough to not be personally affected by the virus itself, these are phenomenal times to reflect on your current financial state and create access to the capital that you can deploy in order to prevail. Somebody somewhere gets very rich in times of crisis. If you don't know how, find out how. Financial literacy is where it's at.




Real wealth is created in a downturn and collected in the rally.

Lloyd Blankfein



Stay fierce, fabulous, and financially savvy bellas!


Besito,




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