Money Matters Summer 2020

MONEY MATTERS | Summer 2020 3 Some carriers are even offering discounts to those who are not traveling as much. • Student Loans – Federal student loan borrowers are automatically being placed in an administrative forbearance until September 30, 2020. For private student loans, check with your lender for assistance. • Other Loans – You should also be aware that other lenders, may be willing to work with you on a case-by-case basis to waive late payments or create a payment plan. However, interest continues accruing, so you will be paying more in interest over the lifetime of the loan. Reach out to each lender if you are suffering a hardship. Prioritize Your Spending Now, more than ever, is the time to determine what expenses are essential to meet your basic needs and which ones may need to be adjusted to get you through the pandemic and beyond. During these times of uncertainty, you need to carefully factor out your wants and needs, while building savings into your spending plan. Consider the following tools to help you prioritize. Use the 50/20/30 rule as your “spending target” of your income (after taxes). Try not to exceed the percentage threshold in each category: • Needs/Essential Expenses (50% of your income) – Home, transportation, utilities, groceries • Savings/Financial Priorities (20% of your income) – Retirement contributions, savings contributions, debt payments ( consider saving more ) • Wants/Lifestyle Choices (30% of your income) – Entertainment, takeout meals, cable, mobile phone, childcare, personal care ( consider spending less ) You can further itemize groupings within each category where you sort purchases based on their overarching use. You will find more opportunities to save money when you shop around, compare, and adjust your spending accordingly. JHFCU’s MoneyMap feature in Online Banking can help you categorize and track spending. Build Healthcare and Emergency Savings into Your Budget If you’re still working, you need to cut down your expenses in case you get sick or lose your job if the pandemic drags on for a long time. You should also try to save enough for healthcare to cover the maximum out-of-pocket limit with your insurance. That way, if you or a loved one does end up needing hospitalization, you will not have to worry about how you are going to pay for it. • Cut down expenses. You should still go down to a bare- bones budget just as those who are out of work need to do. Trim back on nonessentials during tough times. • Prepare for emergencies. Devote every extra dollar you can spare to saving for emergencies and for healthcare. Most experts recommend having three to six months of expenses saved, but now is the time to err on the longer side due to economic uncertainty. • Find extra savings from lower expenses. If your job status has changed or perhaps you work remotely now, you want to take the opportunity to re-direct and apply savings from costs normally incurred while working (parking fees, dry cleaning, gas, childcare) and/or travel, eating out, or other activities to either pay down debts or apply to a rainy day fund for future needs. The pandemic will likely affect your finances, but making the right financial moves can help you make it through the crisis with the minimum amount of financial damage. The key is to cut spending, take advantage of benefits, and shore up your emergency fund so you’re ready if the worst occurs. If you’ve experienced a loss of income, unplanned expenses, or other financial challenges, we encourage you to take advantage of free financial counseling with our partners at GreenPath™ Financial Wellness. Call GreenPath today at 877-337-3399 , and one of their knowledgeable and caring National Foundation for Credit Counseling (NFCC)-certified counselors will help you access the resources and experiences you need to navigate current challenges and make informed financial decisions. It’s free, no-pressure, and 100% confidential. Please review their Aligning Priorities workbook, available at JHFCU’s Financial Tools and Resources center on our website, to help guide you through your financial journey through uncertain times. the Pandemic