The coronavirus pandemic has brought about instability not only to the US economy but all around the world. Stock markets have seen their lowest lows in quite some time, and even big companies have already let go of some of their workers.
Imagine how many employees were laid off from smaller businesses? People living paycheck to paycheck and waiting for funds doled out by the government have increased.
Governments all around the world, along with health experts, are urging cautiousness. People must be prepared for whatever the outcome of this outbreak is. This is not only a matter of health but a lot more.
The lockdown in some countries and states in the US is already lifted. But, more companies are considering continuing the work from home option for some of their employees; social distancing is still being encouraged as a practice while the vaccine for the Coronavirus is always on the works.
Over 26 million people have filed for unemployment in the last six weeks. This is even projected to increase in the next few weeks. Economists forecast 20 million people will be out of work by July as a result of this pandemic.
President Trump has signed a $2.2T emergency relief bill in March. Here are the common questions people ask.
What is unemployment insurance?
If you get laid off from your job, you can file for unemployment insurance. The requirements and benefits per state are different. Here is where you can check what your state offers.
The former unemployment benefits were provided to temporarily help cover your basic needs like food, rent, and utilities until you find a new job. The stimulus package, on the other hand, assists even the self-employed or those who have lost business due to COVID-19.
Who is eligible for the new stimulus package?
You’re eligible to receive benefits if you are a part-time, full-time, or a self-employed worker, as well as people who are unemployed or can’t work because of the coronavirus pandemic. Also included are the following:
People who are to start a new job and did not because of the outbreak
People who collect veteran or Social Security benefits
People who worked for establishments categorized as non-essential
People who care for children or other family members who attend a school or another facility
How much money to expect?
The stimulus package will give you an extra $600 a week on top of your state’s current unemployment insurance package. This will cover you for an additional 13 weeks. For example, if you live in Florida, you’d collect for 12 weeks plus 13 weeks from the stimulus package – that means, 25 weeks in total.
Other states have unemployment benefits that cover more than 26 weeks. This extension means you’re covered for 39 weeks. Even when you have already exhausted all your unemployment benefits, you could always reapply for the additional 13 weeks.
The weekly payouts still vary by state. With California, for example, the residents get $450 a week. The extra $600 would mean their weekly benefits are $1050.
What if I am furloughed?
A furlough is a temporary leave, usually with a tentative end date – this means you did not lose your job. Furloughed employees are still provided with the salary or benefits of their company. The only difference between being furloughed or losing your job when applying for unemployment benefits is that you do not have to prove you lost your job.
What it doesn’t cover?
If you are one of those employees who currently work from home or are getting paid leave, you are not qualified for the updated unemployment benefits. Sometimes, quitting your job will make you ineligible to get the updated unemployment benefits as well.
For example, your place of employment is still open, yet you opted to quit your job, you are most likely ineligible. But, if you had to self-quarantine because of exposure, you are then eligible.
The new and updated unemployment insurance is created to compensate people who quit or lost their jobs as a direct result of COVID-19. However, it still depends on the state to determine if you are eligible or not.
The only way for you to know if you are eligible to receive the benefits or not is to apply. Most states are at capacity at this point because there is a large volume of applicants.
When can I apply?
You can apply for the updated unemployment insurance immediately. While the handling of the applications varies from state to state, it is possible to receive compensation quickly. But depending on the current situation of your state, you might get your money at a later date.
This insurance package is retroactively set to January 27, 2020, until December 31, 2020.
How to apply for the updated unemployment insurance?
All you need to do is apply through your state’s system. Check what their program is and always be reminded that each state operates differently. File according to their requirements and be very patient.
While complying with the requirements and applying for your unemployment insurance, let us give you a few tips in Money Management while being unemployed in this current pandemic.
What to do right now
Whether you have savings or not, it is crucial that you do not go on a spending spree when you get the chance. The amount of uncertainty there is today is scary even to consider spending money on something unnecessary. Budgeting your money is essential.
Determine how much money you are working with. Check your savings or checking accounts, emergency funds, and or other resources. This includes savings that you have other intentions for, like travel or leisure.
If you have got your stimulus package or unemployment insurance, you could include this in your budget. If not, then focus on the cash you have on hand. If you are sure that you will have a consistent income in upcoming months, you can also consider financial services like cash advances or other loans which could be useful as an emergency fund.
Focus your budget on the essentials like rent or mortgage, basic utilities, food, and transportation.
If you have some subscriptions that are unnecessary and auto-renews, better check on them so you can decide whether or not to cancel to avoid the additional cost that could have gone to your essentials.
2. Lower Spending
Lowering your spending is easier said than done because we have been accustomed to certain things. But, ever since the lockdown in the country started, most of us have changed our normal routines, often, unwillingly.
But, now that you have a budget in place and a list of your essentials determine what it is that you can afford. If you do not have enough money to cover everything on your list, it is best to talk with your landlord or loan providers because some of them may be willing to work around the budget that you have, especially during this pandemic.
Remember, it is better to speak to them before your due date because they’d be more understanding rather than when you already missed a payment.
If you have more than enough funds to cover your basic needs, you can then proceed to pay some of your bills – credit cards, for instance, to make sure that you’re still protecting your credit score.
If you are one of the lucky ones to be still earning a salary while on lockdown, it is always smart to make budget cuts. In the current economy that we are in, it is hard to determine whether your income will still be as stable in the next months to come.
It is best to understand which things you can and cannot control – for instance, your spending. It is necessary to protect yourself financially from the Coronavirus impacts on the economy. Use this chance to generate an emergency fund for future use.
3. Look for New Revenue Sources
Budgeting and lowering your expenses may not be enough. It is best if you can replace the income that you have lost – of course, this might be harder right now, especially that more companies are laying people off, but trying to find another full-time or part-time job will help you a lot. Try looking for opportunities online.
We have talked about the stimulus package above, and if you are expecting it to arrive soon and serve as your new source of income, spend it wisely. Budget it well to cover the essentials, and if ever, even consider it as a chance to pay off debts.
4. Prioritize Financial Goals
Say, one of your financial goals for the year is to pay off your student loan, maybe it’s best to put that on hold during this pandemic. If you have some extra cash, then go ahead, but if you can delay it, say, next year, that would be ideal.
If you must create a debt fund and whatever extra money you have, you can put it there. This will be used to continue with your financial goal, maybe after six months or next year. Hopefully, you don’t spend it on other things other than your debts.