My Savings Has Been Wiped Clean; How Can I Replenish it?

Broken Piggy Bank with coins scattered on tableQ: The last few months have been really tough on my finances, and I’ve been forced to use my savings for getting by. My emergency fund and savings account are basically zero. Now that my financial situation is starting to improve, I’d like to start building these up again, but it’s all so overwhelming. Where do I begin?

A: Watching savings that took you years to build up disappear in just a few months can be disheartening, but it’s important to remember that you’ve made the right choice. Using emergency funds to survive prolonged unemployment, an unexpected large expense or a medical emergency is the best way to make it through a financial hardship. If your savings are depleted, though, you’ll want to start rebuilding as soon as possible to ensure you have the funds to cover a future financial challenge without falling deeply into debt.

Here’s how to start your rebuilding plan:

Set a goal
Before getting started on saving up money, it’s a good idea to establish a tangible goal. What’s your magic number? You can try to recover the value of the savings lost, or start smaller, with a more attainable goal. Bear in mind that experts recommend having funds to cover three to six months’ worth of living expenses set aside in an emergency fund or savings account.

Review your budget and trim your spending
A good place to start finding those extra dollars for savings is by carefully reviewing your spending for ways to cut back. Look for expenses that can make a difference in a monthly budget without dramatically affecting your quality of life. Think about subscriptions or services that are rarely used, a dining-out budget that can be scaled back and expensive recreational activities that can be swapped with freebies. There’s no need to live like you’re broke, but stripping your budget of some extras can give you the boost of cash you need each month to build up your savings again.

Find a side hustle
Another great way to land extra funds is through a side job. There are many ways to pad a wallet without a major investment of time. Some options include taking surveys on sites like Survey Junkie and Swagbucks and doing gig work for companies like Uber, DoorDash and Rover.

Sell your old treasures
If you’ve spent part of the COVID-19 lockdown giving your house a deep cleaning, you may have unearthed some forgotten treasures that can turn into easy moneymakers. You can sell old clothing on ThredUp, unwanted jewelry on Worthy.com, make good money off your unwanted furniture through Chairish, sell or trade unused sports equipment on Swap Me Sports and sell kids clothing and toys on Kid to Kid. Use the cash you earn from these sales to jumpstart your new nest egg.

Make a plan
Once you have a goal in place for building your savings, and you’ve maximized the possible monthly contributions toward savings each month, it’s time to create a plan. Map out a timeline of how long it’ll take to reach your goal when putting away as much as possible each month. Remember: the more aggressively you save now, the sooner you’ll reach your goal.

Start saving
It’s time to put the plan into action! The best way to ensure regular savings happens each month is to make it automatic. You can set up an automatic monthly transfer from your Advantage One Credit Union Checking Account to your Advantage One Credit Union Savings Account on a designated day of the month. You may want to have the transfer go through several days after you receive your monthly salary, or it might work out better to put a smaller amount of money into savings each week. Give us a call at 734-676-7000 to discuss your options.

Put unexpected windfalls into savings
To speed up the process of rebuilding depleted savings, you may want to resolve to put unexpected windfalls into an emergency fund or savings account. This can include tax refunds, a work bonus and gift money. If another round of Coronavirus stimulus checks is approved, consider using these funds for your savings as well. Earmarking future windfalls for savings can shorten the amount of time spent cutting corners in a budget and taking on extra jobs to build up a savings account.

Rebuilding an emergency fund and savings account from the bottom up isn’t easy. It takes commitment, hard work and the ability to keep a long-term goal in mind; however, the security that comes from knowing you have a safety cushion to fall back on in case of a financial setback will make this goal worth the effort many times over.

Your Turn:
Have you started working on rebuilding your savings? Tell us about it in the comments.

Learn More:
policygenius.com
fool.com
moneymanagement.org

All You Need to Know About Student Loan Changes During COVID-19

Female College student with class supplies in arms smiles as she is walking on campusWith unemployment levels rising and many employers cutting work hours, lots of college grads are now struggling to meet their student loan payments. Thankfully, the federal government has passed legislation to ease this burden. Unfortunately, though, many borrowers are confused about the terms and conditions of these changes.

Here’s all you need to know about the changes to student loan debt during the coronavirus pandemic.

All federal student loan payments are automatically suspended for six months
As part of The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) signed into law on March 27 all federal student loan payments are suspended, interest-free, through Sept. 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal of the loan. The suspension applies to all federal student loans owned by the Department of Education as well as some Federal Family Education Loans (FFEL) and some Perkins loans. Students do not have to take any action or pay any fees for the suspension to take effect.

Additionally, during the suspension period, the CARES Act does not allow student loan servicers to report to the credit bureaus borrower nonpayments as missed payments. Therefore, the suspension should not have a negative effect on borrowers’ credit scores.
If you’re not sure whether your student loan is federally owned, you can look it up on the Federal Student Aid (FSA) website. Be sure to have your FSA ID handy so you can sign in and look up your loans. You can also call your loan servicer directly to clear up any confusion.

Here is the contact information for federal student loan servicers:

Suspended payments count toward Public Service Loan Forgiveness and loan rehabilitation.
Public Service Loan Forgiveness (PSLF) is a federal program allowing borrowers to have their student loans forgiven, tax-free, with the stipulation that they work in the public sector and make 120 qualifying monthly payments. A disruption of these 120 payments can disqualify a borrower from the program.

According to the CARES Act, suspended payments will be treated as regular payments toward PSLF. This ensures that borrowers who have been working toward these programs will not lose the progress they’ve made toward loan forgiveness.

The same rule applies to individuals participating in student loan rehabilitation, during which borrowers with defaulted student loans must make nine out of 10 consecutive monthly payments to pull their loans out of default. The U.S. Department of Education will consider the six-month suspension on payments as if regular payments were made toward rehabilitation.

Some states and private lenders are offering student loan aid for struggling borrowers.
If your student loan is not federally owned and you are struggling to meet your payments, there may still be options available, such as loan deferment or forbearance. If you are in need of such assistance, contact your lender directly to discuss your options. Consider an income-driven repayment plan.

If you have an FFEL that is ineligible for suspension, you can lower your monthly payments by enrolling in an income-based repayment plan, which adjusts your monthly student loan payment amount according to your discretionary income. Other lenders offer similar plans, often referred to as income-driven repayment plans. If your salary was cut as a result of COVID-19, or you are currently unemployed, these plans can provide relief by making your monthly payments more manageable.

Employers can contribute toward employees’ student loan debt for temporary tax relief
The federal government offered temporary tax relief for employers contributing up to $5,350 toward their employees’ student loan payments. This benefit is in effect until Jan. 1, 2021 and it can be used for any kind of student debt, whether federal or private.

If you don’t qualify for the student loan payment suspension, you can try speaking with the human resources department at your workplace to find out how they can help you with your student loan debt at this time.

Your Turn:
Have you taken advantage of student loan debt relief offered during the coronavirus pandemic? Tell us about it in the comments.

Learn More:

Cut Clothing Costs

young asian woman consults phone while shoppingIt’s a brand-new season, but that doesn’t mean you need to break your budget to get your wardrobe ready for spring! Challenge yourself to spend half of what you usually do on a new season’s wardrobe. Make the rounds of consignment shops in your community. They should be bursting with offerings from everyone else’s spring cleaning. Next, look for low-cost options at bargain-priced department stores like Marshalls and TJ Maxx. You can also find a friend to swap clothing with, and give an old outfit new life with some inexpensive accessories instead of springing for a whole new look.

Your challenge:
Cut your clothing costs this month!

Your Turn:
Show us the best of your budget-priced spring wardrobe!

Getting Ahead on Your Student Loan Before You Graduate

young woman working at a laptop in an officeAs you prepare for graduation and begin scouting different employment opportunities, be sure to look at the larger picture before you accept a position.

Hopefully, you’ve chosen a career path that will bring you joy and gratification. Equally important, though, is a job that can support your lifestyle choices. While the positions you consider for your first post-college job will likely offer the opportunity for growth, you’ll still need to pay your bills—and make your student loan payments—as soon as you graduate. A job that brings you satisfaction and a pleasant working environment will not last long if the salary it offers causes you to sink into debt.

How do you determine what kind of salary will be large enough to support your desired lifestyle?

To get this information, you’ll need to create a mock monthly budget for your post-college self.

Using a spreadsheet or paper and pen, create two columns, one for expenses and one for actual dollar amounts. In the expense column, list your typical monthly expenses, including housing costs, transportation costs, health insurance, groceries, entertainment costs, clothing costs, dining out, savings, etc. In the dollar column, list the amount of money you expect to pay every month for each expense.

Your budget should look something like this:

ExpenseMonthly Cost
Housing$1,200
Transportation$300
Health Insurance$250
Groceries$350
Student Loan Payments$350

It will take some research and some hard, honest thinking to come up with these numbers. For housing costs, take a moment to think about where you see yourself settling down after college. You don’t have to know the exact neighborhood you’ll live in, but it’s good to know the city that will work best for you in terms of lifestyle, career path, and family plans. You can narrow this down to a few choices so long as you keep it reasonable. Once you’ve chosen your desired location, research the median rental prices in the area on real estate sites like Zillow and Redfin.

Next, work on transportation costs. If you already own a car, you’ll have an idea of what it costs you each month. Otherwise, spend some time thinking about what kind of car you want to drive. You can find listings on Carfax.com. Include costs like auto insurance, gas, and upkeep, in this category.

Or, if you plan on living somewhere with reliable public transportation, you might choose this route instead. Make a calculation of how much you’ll spend on bus and/or train rides, along with the occasional cab or ride-share ride.

Complete your budget using your best estimates for each category. Once you’ve filled out each expense amount, add up your total and multiply it by 12 to give you the amount of money you’ll need each year for supporting the lifestyle of your choice. (This number will increase with inflation, but since current salaries will likely increase along with the inflation rate, this exercise can still give you an idea of the annual salary you’ll need.)
Now that you have these numbers, you’re ready to go ahead with your job search. When considering possible positions, you don’t have to choose the one that pays the highest salary if there are other things about the job you don’t love. However, it’s best to pursue positions that can actually support you.

Your Turn:
Are you choosing your first job for the salary or for other factors? Share your take with us in the comments.

Learn More:
knsfinancial.com
usnews.com
usnews.com
brazen.com

Jordan Page

Jordan PageMeet Jordan Page, a tireless mom of eight — including newborn twins. In between keeping her house running and her kids productively occupied and out of trouble, Page has built up a strong community of online followers with two separate and equally popular personal finance sites. As these communities will attest, she’s all about keeping your finances real, easy and fun!

In BudgetBootcamp, readers are invited to join a financial improvement program for just $149. The program is customizable to all life stages and circumstances, and includes 27 how-to videos, 15 workouts for your wallet, loads of budgeting tips and financial advice from Page, along with the strong community support of hundreds of thousands of families who’ve already worked through the program.

Participants will learn how to stop fighting about money, create a custom financial fitness program that actually works, slash your grocery bill in half and so much more! Page promises full satisfaction or your money back, so there’s nothing to lose by trying out Budget Boot Camp — except debt and stress over money. You can also try out the program by signing up for a 90-day Budget for Beginners Boot Camp for free.

Page’s other site, FunCheapOrFree.com, contains loads of completely free financial advice and tips, all written in an engaging and easy-to-read style that makes saving money fun. Read up on painless ways to trim your spending, budget-friendly recipe ideas, how you can save more by choosing to DIY on everything from washing your car to gift-giving, motivational messages to keep you inspired and so much more.
Page can be followed on Twitter at @budgetbootcamp and @funcheaporfree, and on Facebook.

Your Turn:
Do you follow Jordan Page? Tell us what you love about her financial approach.

Learn More:
funcheaporfree.com
budgetbootcamp.com

The Complete Guide to Prioritizing Bills During a Financial Crunch

Young woman stares at bills worriedly with head in handsOur vibrant, animated country has been put on pause. Busy thoroughfares are now empty of pedestrians and previously crowded malls are eerily vacant, as millions of Americans shelter in place to slow the spread of the coronavirus. Forced leave of work has left many wondering if and when they’ll receive their next paycheck.
If you are one of the millions of Americans on furlough, you may be panicking about incoming bills and wondering where you’ll find the money to pay for them all. Let’s take a look at what financial experts are advising now so you can make a responsible, informed decision about your finances going forward.

Triage your bills
Financial expert Clark Howard urges cash-strapped Americans to look at their bills the way medical personnel view incoming patients during an emergency.

“In medicine it’s called triage,” Howard says. “It’s exactly what’s happening in the hospitals right now as they decide who to treat when or who not to treat. You have to look at your bills the same way. You’ve got to think about what you must have.”

Times of emergency call for unconventional prioritizing. Clark recommends putting your most basic needs, including food and shelter, before any other bills. It’s best to make sure you can feed your family before using your limited resources for loan payments or credit card bills. Similarly, your family needs a place to live; mortgage or rent payments should be next on your list.

Housing costs
It’s one thing to resolve to put your housing needs first and another to actually put that into practice when you’re working with a smaller or no paycheck this month. The good news is that some rules have changed in light of the financial fallout of the pandemic.
On March 18, President Donald Trump announced he’s instructing the Department of Housing and Urban Development (HUD) to immediately halt “all foreclosures and evictions” for 60 days. This means you’ll have a roof over your head for the next two months, no matter what.

Also, in early March, the Federal Housing Finance Agency offered payment forbearance to homeowners affected by COVID-19, allowing them to suspend mortgage payments for up to 12 months. These loans, provided by Freddie Mac and Fannie Mae, account for approximately 66 percent of all home loans in America. The payments will eventually need to be covered. Some lenders allow delayed payments to be tacked onto the end of the home loan’s term, while others collect the sum total of the missed payments when the period of forbearance ends.

Speak to your lender about your options before making a decision. A free pass on your mortgage during the economic shutdown can be a lifesaver for your finances and help free up some of your money for essentials.

If you’re a renter, be open with your landlord.
“Consumers who are the most proactive and say, ‘Here’s where I stand,’ will get a lot better response than those who do nothing,” says Lynnette Khalfani-Cox, CEO of AsktheMoneyCoach.com and author of “Zero Debt.”

Your landlord may be willing to work with you. That’s true whether it means paying partial rent this month and the remainder when you’re back at work, spreading this month’s payment throughout the year, or just paying April’s rent a few weeks late, after the relief funds and unemployment payments from the government begin.

Paying for transportation
When normal life resumes, many employees will need a way to get to work. Missing out on an auto loan payment can mean risking repossession of your vehicle. This should put car payments next on your list of financial priorities. If meeting that monthly payment is impossible right now, communicate with your lender and come up with a plan that is mutually agreeable to both parties.

Household bills
Utility and service bills should be paid on time each month, but for workers on furlough due to the coronavirus pandemic, these expenses may not even make it to their list of priorities.

First, don’t worry about shutoffs. Most states have outlawed utility shutoffs for now.
Second, many providers are willing to work with their clients. Visit the websites of your providers and check to see what kind of relief and financial considerations they’re offering their consumers at this time.

It’s important to note that lots of households receive water service directly from their city or county, and not through a private provider. Many local governments have suspended shutoffs, but be sure to verify if yours has done so before assuming it to be true.

Finally, as with every other bill, it’s best to reach out to your provider and be honest about what you can and cannot pay for at this time.

Unsecured debt
Unsecured debt includes credit cards, personal loans and any other loan that is not tied to a large asset, like a house or vehicle. Howard urges financially struggling Americans to place these loans at the bottom of their list of financial priorities during the pandemic. At the same time, he reminds borrowers that missing out on a monthly loan payment can have a long-term negative impact on a credit score.

Here, too, consumers are advised to communicate with their lenders about their current financial realities. Credit card companies and lenders are often willing to extend payment deadlines, lower the APR on a line of credit or a loan, waive a late fee or occasionally allow consumers to skip a payment without penalty.

Your Turn:
How are you prioritizing your bills during the pandemic? Share your tips with us in the comments.

Learn More:
clark.com
nationalpost.com
consumerfinance.gov
katu.com
businessinsider.com

Overcoming Deptostrofy

MayFeatured2020_OvercomingDepttoTitle: Overcoming Deptostrofy: A Complete Guide to Debt and Loans Management for Free Life Forever and Ever
Author: David Stokes
Publisher: Self-published
Date published: June 24, 2019
Paperback: 73 pages
Average customer review: 5.0 out of 5 stars

Who is this book for?
Anyone carrying outstanding debt
Readers seeking to gain control of their debt
People looking for a way to honestly assess their financial situation

4 things you’ll learn from this book:

  1. How people get stuck carrying debt
  2. How to tell good debt from bad debts
  3. The benefits of money management
  4. How to recognize bad financial advice

5 questions this book will answer for you:

  1. Is there really a way out of deep debt?
  2. What are the different types of debt?
  3. What’s the first step I need to take to pull myself out of debt?
  4. What’s the best way to handle my outstanding loans?
  5. How can I ensure that a financial emergency does not send me back into debt?

What people are saying about this book:

  • “(It’s) really a complete guide to getting out of debt.”
  • “This book is a must-read for anyone who wants to know about loans management.”
  • “This book is so informative, and (it) has strategies I can use right away.”

Your Turn:
Do you believe it is always possible to pull yourself out of debt? Why, or why not? Share your thoughts with us in the comments

Learn More:
amazon.com
bookauthority.org

How Should I Spend My Stimulus Check?

Handwritten budget figures on notepadThe stimulus checks promised in the Coronavirus Aid, Relief and Economic Security (CARES) Act are starting to land in checking accounts and mailboxes around the country. The $1,200 granted to most middle class adults is a welcome relief during these financially trying times.

Many recipients may be wondering: What is the best way to use this money?
To help you determine the most financially responsible course of action to take with your stimulus check, Advantage One Credit Union has compiled a list of advice and tips from financial experts and advisers on how to use this money.

Cover your basic life expenses
First and foremost, make sure you can afford to cover your basic necessities. With millions of Americans out of work and lots of them still waiting for their unemployment insurance to kick in, many people are struggling to put food on their tables. Most financial experts agree that it’s best not to make any long-term plans for stimulus money until you can comfortably cover everyday expenses.

Charlie Bolognino, CFP and owner of Side-by-Side Financial Planning in Plymouth, Minn., says this step may necessitate creating a new budget that fits the times. With unique spending priorities in place, an absent or diminished income and many expenses, like subscriptions and entertainment costs, not being relevant any longer, it can be helpful to reconfigure an existing budget to better suit present needs. As always, basic necessities, such as food and critical bills, should be prioritized.

Build up your emergency fund
If you’ve already got your basic needs covered, start looking at long-term targets for your stimulus money.

“I would immediately place this money in my emergency fund account,” says Jovan Johnson, CEO of Piece of Wealth Planning in Atlanta.

Emergency funds should ideally be robust enough to cover 3-6 months’ worth of living expenses. If you already have an emergency fund, it may have been depleted during the pandemic and need some replenishing. If you don’t yet have an emergency fund, or your fund isn’t large enough to cover several months without a steady income, you may want to use some of the stimulus money to build it up so you have a cushion to fall back on during lean times that are likely to come in the months ahead.

Pay down high-interest debts
According to the Federal Reserve Bank, Americans owed a collective $930 billion in credit card debt during the fourth quarter of 2019. Using some of your stimulus check to pay off high-interest debt would be a great way to get a guaranteed return on the money, says Chris Chen, of Insight Financial Strategists in Newton, Mass.

This advice only applies to credit cards and other private, high-interest loans. The federal government put a 6-month freeze on most student loan debts, so they should not be as high a priority right now.

Boost your savings
If your emergency fund is already full and you’ve made headway on your debt, it can be a good idea to use some of the stimulus money to add to your Advantage One Credit Union savings account. The money in your savings can be used to cover long-term financial goals, such as funding a dream vacation or covering the down payment on a new home.

Consider all your options before choosing how to spend your stimulus money. In all likelihood, this will be a one-time payment received during the pandemic. If you need further assistance, feel free to reach out to us at 734-676-7000 or news@myaocu.com. We’ll be happy to help you maintain financial stability during these uncertain times.

Your Turn:
How are you spending your stimulus check? Tell us about it in the comments.

Learn More:
marketwatch.com
bankrate.com

Give Your Finances Some Therapy With Amanda Clayman

Protrait of Amanda ClaymanMeet Amanda Clayman, a financial therapist and influencer who uses a therapeutic approach to help people get their finances on track.

Clayman is no stranger to financial struggles. She shares her journey on her blog, telling the story of the “$19,000 haircut” which served as her personal rock bottom and forced her to take her career in a new direction. Clayman makes it clear that it was not a lack of financial literacy or an upbringing steeped in bad money habits that led to her money troubles. Instead, it was the snowball effect of one bad choice leading to another, until she was struggling under a mountain of debt with no visible way out.

Today, Clayman is a popular financial influencer and a practicing clinician who specializes in money issues. In 2006, she partnered with The Actors Fund and founded a cognitive behavioral therapy-based financial wellness program. She says that money can be a tool for transformation, and this belief helps shape her approach for financial healing.

Clayman tells her followers that financial challenges are inevitable; they can only control their reactions. They need to be proactive at developing a healthy way to handle these setbacks so they can set firm, loving boundaries, make value-based decisions and align behavior with intentions when faced with a financial hardship. Ultimately, this will enable followers to view these challenges as a source of personal growth and empowerment.

You can read Amanda’s story on her blog and follow her on Twitter at @mandaclay to learn more about this transformative approach toward money management and financial wellness.

Your Turn:
Do you have a plan in place for financial setbacks? Tell us about it in the comments.

Learn More:
twitter.com
amandaclayman.com

Finessin’ Finances

This book at a glance: Finessin' Finances - the refreshingly entertaining guide ot personal finance.
Title: Finessin’ Finances
Author: Stefon Walters
Paperback: 152 pages
Publisher: Just Believe Company
Date published: Feb. 7, 2019
Average customer review: 5.0 out of 5 stars

Who is this book for?
People interested in learning about basic financial topics through clear, easy-to-understand language
Anyone who finds finances boring
Readers who love to laugh while learning valuable information

5 things you’ll learn from this book:

  • How to navigate the world of credit and credit cards
  • Basic investing for beginners
  • Best practices for managing your student loans
  • How to create and stick to a budget
  • Practical ways to plan for retirement

6 questions this book will answer for you:

  • What is my credit score and why does it matter?
  • How can I improve my credit rating?
  • Are credit cards good for my finances?
  • How can I create a budget that’s designed for my lifestyle?
  • Should I start investing?
  • Why do I need to worry about my retirement when it’s so many years away?

What people are saying about this book:

“Stefon Walters approaches the topic of personal finances from a humorous, informative, and fluent manner. He gives insightful and realistic ways to dominate your finances with self-control and knowledge.”

“A fun read with great explanations and sample templates.”

“I feel like the author is talking to me and not at me.”

“I love the witty terminology used in the book; it made it fun to read.”

Your Turn:
Do you find financial talk boring? Share your thoughts with us in the comments.

Learn More:
bookauthority.org
goodreads.com
thebalance.com