Tag Archives: debt

Jan 23 2021

Coping With the Corona Virus-Related Financial Stressors

KEY POINTS

  • Nearly half of U.S. adults have reported that their mental health has been negatively impacted due to worry and stress over the virus, according to a Kaiser Family Foundation poll.
  • A new NFCC survey finds situations that immensely exacerbate financial worries include not having enough savings, losing a job and the inability to pay debts.
  • Many large health insurance companies as well as Medicare have increased their capacity and coverage for telehealth visits with mental health providers.

Here are some tips from the mental health and financial experts on how best to cope with these common money stressors.

1. Not enough savings

If you find yourself struggling financially and have a limited emergency fund — or none at all — focus instead on what you can control. “First, carefully examine your expenses and reprioritize your spending. Cut out everything but the essentials , such as,  mortgage or rent, food, utilities and insurance,” said author and certified financial planner Carrie Schwab-Pomerantz, who is also president of the Charles Schwab Foundation. “If you’re unable to pay a bill, contact your creditors right away. They may be willing to negotiate a payment schedule or waive late fees.

2. Job loss

If you haven’t already, file for unemployment benefits immediately through your state’s program. There will likely be a lag time until you receive your first check.

  • Make sure you still have health insurance. You could switch to COBRA to receive the same coverage you had under your employer for the next 18 months, but you have to pay for it yourself at a considerably higher cost than you were paying as an employee. “Do some comparison-shopping.”
  • Consider other jobs that you may be able to pursue. Use your down time to learn a new skill or start that side-hustle. Education, health care, and technology companies are among some of the industries hiring remote workers right now.

3. Inability to pay your debts

Nearly half of U.S. adults currently have credit card debt and 13% of them are not paying anything at all or don’t have a plan on how to pay, according to a report by CreditCards.com. 

Consider temporarily paying only the minimum on mortgage/rent, car loans and student loans as well, said Schwab-Pomerantz, whose Schwab MoneyWise website has a list of resources to help during the Covid-19 crisis. More help could be available. You may be able to lower or suspend your mortgage payments for up to one year in some cases. Contact your lender.  If you’re having trouble paying your rent, talk to your landlord about your situation and your options. Some states and municipalities are providing eviction restrictions for impacted individuals. Many utilities and phone companies have stopped cutting off services for nonpayment. Call them.

For more information, click here.

Teaching Suggestions

  • Ask students how the corona virus has affected them, their relatives, or friends. What steps have they taken to minimize the effects of the corona virus?
  • List the steps to take if you don’t have enough emergency funds to get through this financial difficult period.

Discussion Questions

  1. How are millions of Americans coping with stress and anxiety as they deal with the fear and reality of death and disease due to the corona virus pandemic?
  2. Discuss the economic and emotional worries that are keeping American awake at night.
Dec 5 2020

Managing your bills during COVID-19

COVID-19 has thrown the economy into a tailspin. Many people have been laid off, furloughed, or are working fewer hours. And as wages dry up, bills can pile up.

Debt can be tricky. Here are some ideas about how you can manage your debts and start regaining your financial well being.

  • Gather your bills: Make a list of your monthly bills: rent/mortgage, car payment, utilities, student loans, medical bills, and anything else. Consider how much you need for food, medicine, and other necessities.
  • Ask for help: Many companies have special programs to help people right now. Contact the companies you owe money to and try to work out a new payment plan with lower payments or delayed due dates. Make sure to get any changes in writing.
    • Find out if your state or local government offers programs that will allow you to hold off on paying some bills right now.
    • Trouble paying your mortgage? Here’s some advice on how to manage that problem. If you have a government-backed mortgage, you may be able to delay payment by contacting your servicer.
    • Need additional help? Check out ftc.gov/creditcounselor for tips on how to choose a counselor who really helps you out.
  • Prioritize if you need to: If you still can’t pay everything on time, look at what would happen if you couldn’t pay each bill and decide which bills to pay first. Would you lose your home? Would your car be repossessed? Would your debt go into collection and affect your credit report?
  • Study up: Check out the FTC’s advice on how to cope with debt in the short term, and how to get out of debt when you are able.
  • Watch out for scams: In stressful times, scammers are everywhere. Beware of any company that guarantees that creditors will forgive your debts, or makes you pay up front for help. If you are looking for debt relief, make sure to find help you can trust.

For more information, go to: click here.

Teaching Suggestions

  • Ask students to develop a plan to manage their debts, especially during the coronavirus pandemic.
  • Ask students if they should turn to a company that claims to offer assistance in solving debt problems? Why or why not?

Discussion Questions

  1. Why should you avoid waiting until your account is turned over to a debt collector?
  2. What is a constant worry for a debtor who is behind in payments of bills?
Sep 12 2015

10 Reasons You Will Never Get Out of Debt

“Do you feel as if you’ll be in debt forever?  You’re not alone.”

According to a CreditCards.com survey, 13 percent of Americans say they’ll never pay off all their loans, and another 8 percent say they won’t pay off what they owe until they’re 71 years old.  While the results of the survey are discouraging, this Kiplinger article describes the following 10 reasons people can’t get out of debt and also provides suggestions for getting out of debt.

  1. You don’t know how much you owe.
  2. You pay only the minimum.
  3. Your mortgage is too big.
  4. You took out too many student loans.
  5. You can’t say no to your kids.
  6. You don’t have money for emergencies.
  7. You feel a sense of entitlement.
  8. Your car loan is too long.
  9. You rack up late fees.
  10. Your interest rates are too high.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Explain how people get in trouble when they make financial decisions without considering the consequences.
  • Go into more detail about how each of the 10 reasons described in this article affect an individual’s financial future.

Discussion Questions

  1. How do you plan to balance your objective of creating an enjoyable and entertaining life with the objective of building a secure financial future?
  2. Based on the 10 reasons in this article, what steps can you take to improve your financial planning for the future.