Smart financial moves for every life stage during COVID-19
The COVID-19 pandemic has impacted individuals and families on many levels, from employment and kids’ education status, to prioritizing expenses and saving for the future. No matter where you are on this spectrum, assessing your current situation, considering your options and knowing what resources are available can help you keep your finances on track.
Read on for tips and considerations by life stage to help you manage your money in uncertain times.
Life stage: Recent college grads and young professionals growing their careers are likely focused on budgeting, paying bills and paying down debt, like student loans. While saving for retirement may not be a priority right now, many are working toward saving for bigger goals like a new car or house down payment.
Financial challenges & considerations: If you’re employed, try to keep debt to a minimum to avoid paying interest, while continuing to save. If your employer offers a 401(k) with a match, try to contribute at least the minimum to receive the match. If your student loan payments are on hold with the CARES Act, you should expect to resume payments this fall.
If you’ve experienced lost or reduced income due to the pandemic, contact your creditors, including your landlord and utility providers, to discuss your options. You may also want to consider student loan forbearance or new loan repayment options that may be available to you.
Young and Mature Families
Life stage: This life stage often involves balancing mortgage payments with saving for college, retirement and other goals, all while paying down credit cards and other debt.
Financial challenges & considerations: If you’re employed, you may want to consider refinancing your mortgage to take advantage of current low interest rates, which may lower your monthly payment and give your budget more wiggle room to help address other goals. A mortgage refinance or a home equity line of credit (HELOC) may also help you consolidate higher interest debt or finance a large essential purchase, like a new roof.
If your income has been impacted and you’re having difficulty making mortgage payments, the CARES Act has made it easier for homeowners to seek forbearance, which may temporarily let you suspend or reduce your monthly payments. While mortgage forbearance varies by the type of loan you have, it’s always a good idea to contact your lender directly, as soon as possible, to discuss your situation and options.
Mortgage relief options, including how to find out which ones you qualify for and how to request relief
Low interest federal disaster loans for small businesses, homeowners and renters
Life stage: Age 50+, nearing retirement or recently retired, can find you focused on paying down debt, saving and planning for your retirement.
Financial challenges & considerations: If you’re feeling financial strain, you may want to consider options like working longer than you originally planned or rethinking your retirement lifestyle. You may also be able to borrow from your retirement funds to pay bills or take advantage of possible early distributions this year without penalty. While it’s nice to know the option is there, try to resist the temptation to tap your future nest egg if you have the income sources to keep up with current bills and expenses.
Stay informed and stay on track
Information about economic relief programs and stimulus aid continues to evolve daily. For instance, some CARES relief programs may be extended, and there may be another round of stimulus payments. For the most up-to-date information and status of specific CARES programs, be sure to check The CARES Act site.
Of course, even without the uncertain times we face — and regardless of your life stage — it’s always a good idea to continue practicing smart financial habits that will help you stay on target to reach your goals. This includes keeping a close eye on your budget, prioritizing essential versus non-essential expenses, building an emergency fund, saving for future goals (including retirement) and paying down debt.
If you’re a Commerce Bank customer and your finances are impacted by COVID-19, or you simply want to discuss your financial plan and solutions, please call us at 833-518-3458 to discuss your current accounts.