Where to Find Financial Help if You Have Lost Income
by Scott K. Schmidt, Chief Financial Officer, U.S. Money Reserve
There’s no question that 2020 has been a tough year, but it can be especially challenging if you’ve lost income. Here’s where to seek assistance.
As the pandemic continues to rage and the economic effects continue to ripple throughout the country and the world, it’s time we start thinking about how to plan for a longer-term disruption to our livelihoods. As coronavirus cases surge once again across the country, it’s also likely that certain jobs won’t ever come back, according to the AP — not even after a viable vaccine is found. That is a scary prospect for the more than 700,000 Americans who filed for unemployment during the first week of November.
Job losses have disproportionately impacted women and people of color, according to Federal Reserve Chairman Jerome Powell — and that has wide-ranging implications for our economy’s future health as a whole. According to CNN Business, Powell said, “We’re recovering but to a different economy.”
Losing a job or experiencing a disruption in income is never easy to navigate. It not only disrupts our inflow of cash, but it also disrupts our mental and physical health. Income interruption can cause intense stress and depression and even contribute to illness. That’s why it’s always vital to have a backup plan in place should you end up in a spot where you need to get assistance. Here’s a good primer of where to start if you have lost income over the last year.
If you’ve lost your job, had your hours cut, or been furloughed because of COVID-19, it’s likely that you can file an unemployment claim. The CARES Act added federal money to state unemployment benefits through the end of July, which was a boon for many people. However, Congress failed to pass an extension of the act, leaving many without the support of additional money coming from the federal government. Unemployment insurance is meant as a stopgap measure to help those who have lost their jobs continue to have some money while they look for new work.
The termination of the unemployment extension doesn’t mean that you can’t get unemployment. You can still get it, just not at the higher rate that was previously available. You should apply for unemployment as soon as you lose your job. While many states have had a backlog of claims and may take time to process, unemployment is a great option to help fill the gaps while you look for work. Each state has different requirements and methods, so be sure to check with your local and state government to figure out how to apply and how much you are eligible for. You can look up your state’s info here and see a rundown of how to apply for unemployment here.
Get Help Paying Your Bills
I’ve written before about how to plan and protect your business during tough economic times. One of the things I genuinely believe has value is knowing that you can reach out to your creditors and lenders to negotiate your bills when times get tough. Negotiating can be absolutely invaluable, whether you are a small business owner or just trying to manage your personal finances. It’s vital to communicate with anyone you owe money to let them know that you have fallen on tough economic times and need help. In more cases than not, they are likely to try and work with you to keep your accounts in good standing and prevent anything from falling into arrears.
If you’re a small business owner, you can pursue several avenues to get help paying your bills, including taking out small business loans from your local bank and looking for investors to help you through the tough times. A great resource is your local or state Small Business Administration or a small business development group in your area. They can help you figure out how to get the cash you need, and they can give you great advice on where to find other options for financing.
If you’re simply trying to make ends meet and aren’t a small business owner, there are many options you can turn to get help with your bills. The best place to start is your local Community Action Association, or CAA, which can help you find programs you might be eligible for and help you apply for the right ones. You can also check out sites like Need Help Paying Bills, an organization run by people who have a long history of working with people who need financial advice, budgeting help, and financial guidance during tough times.
Get Help with Health Insurance
When you lose income or a job, health insurance costs can become a real struggle to meet. If you are still employed, you might consider shifting into a lower-cost plan that still meets your needs. Each year, employers offer open enrollment and allow you to make changes to your existing plan. During this time, it also makes sense to start up a flexible spending account that sets pretax money aside from your paycheck and puts it into an account that you can use to pay for things like medications, copays, doctor appointments, and other medical-related expenses. It can help you save money in the long run, too, and any unused money in the account will roll over into the next year.
If you have lost your job or your business, and you need to find a way to cover yourself and your family, you should look to healthcare.gov to find out how to get health insurance in your state. Each state runs a health exchange that allows people without employer-paid insurance to purchase insurance directly from insurers on the open market. While you will still have a monthly or annual bill, the amount will be reduced — and it’s best to maintain your coverage for when and if you need it.
If health insurance becomes a reach for you, you can also apply for Medicare and Medicaid through healthcare.gov to determine whether you are eligible for a reduced-cost or free health insurance program.
Start Thinking About Your Taxes
Regardless of how 2020 shakes out and whether or not you own a small business, we’re all going to have to pay taxes this year. It’s best if you start thinking about how to save for taxes and manage them now. If you can stash cash to cover your upcoming expenses, you can ensure that you don’t go into debt come tax time.
You can also look at tax relief programs that are offered in your state and city. Some locations provide support, tax planning services, and relief so that you can continue to make ends meet while you work through this challenging financial time. KPMG recently put together a primer on where you can find tax relief in your state.
Other Ways to Get Financial Help
Fundraising isn’t just for small business owners. As an individual, you can start a GoFundMe campaign to get the help you need or donate to GoFundMe campaigns to help others in need during the pandemic.
You can also get involved in lending circles that help communities support each other during tough financial times. Lending circles might even help you build your credit rating back up if it’s gotten dinged over time. Check out Mission Asset Fund, a nonprofit organization that helps people start or join lending circles responsibly, to learn more.
There are also mutual aid groups, which are grassroots organizations with no government, corporate, or charity involvement (though these can include local businesses). Essentially, a community comes together to pledge support for each other in times of need. Whoever needs help gets it. The help can include cash, food, supplies like masks, physical assistance (like help with transportation or chores), or other support. Mutual aid groups are often organized by neighborhoods, but sometimes by other types of community groups like churches or LGBTQIA+ groups.
An excellent place to start looking for these kinds of mutual aid groups is the Mutual Aid Hub, a resource to find existing groups near you.
The Bottom Line
This year has not been kind to anyone, thanks in part to the wide-ranging and ongoing impact of COVID-19. Whether you have lost some portion of your income or lost your job, it’s essential to know that there are ways to get help. When things get tough, the best thing to do is to reach out and find resources that can support you. While this list is far from comprehensive, it can offer a great starting place to find financial help when you need it most.