GREENVILLE, SC (FOX Carolina)- Hopes of a second stimulus check have been put on hold. President Trump announced discussions on a second round of COVID-19 relief won’t happen until after the election.
President Trump is instead directing Republican legislators to focus on confirming Supreme Court nominee, Amy Coney Barrett.
Phillip Allen from Common Sense Retirement says that, as many of you know so well, your pockets have been affected by COVID.
He says people are scrambling to find a plan for their savings and even retirement funds that people have had to dig into to get by over the based few months.
With the looming second stimulus check, Allen says money is tight for most sending people scrambling to make a plan for how to recoup their savings.
He says if you’ve seen the headlines about markets suffering, that’s because markets hate uncertainty.
In the wake of the news, the stock market dropped sharply, with U.S. benchmark stocks closing low.
Hope that legislators would reach an agreement on a second round of stimulus money had helped boost Wall Street in recent weeks.
President Trump tweeted that he would work on a second stimulus proposal after the election that focuses on workers and small businesses.
Experts say an additional relief bill most likely will not be passed until next year and that could lead to a sluggish recovery from the earlier recession.
Some may have taken advantage of the provisions made possible through the CARES Act to take money out of your 401(k) without penalty, but now people reaching out for professional help to consider their options for how to move forward as far as their retirement plans.
“We take into account in planning that we are going to have a market in down markets, unusual things happen so once you get a plan then you just work the plan, “Allen says, “so that is why we have so many people coming in saying that I need some professional help to develop a plan so that when these things happen, when everything happens, I don’t have a deer in the headlight about my financial situation.
Here is a resource to help begin the planning process.
Whether we get another stimulus check now or in a couple months after the election, he says it is crucial to prioritize what is most important to tackle with that money or any money you bring in right now.
Tips for Adjusting Your Budget
A budget is key to feeling financially secure right now and determining if you can make ends meet.
Write out your new budget. List all your expenses, including fixed expenses like your mortgage, car payment and cell phone bill. It should also include variable expenses, such as utility payments, groceries and entertainment. I have a budget worksheet on my website, csrp.info.
Then determine how much income you have coming in. Account for any loss of unemployment money moving forward and see where you can make cuts right now.
Even temporary cuts can help you weather this pandemic.
Review Your Savings
If you are laid off or facing extreme financial difficulty right now, it could mean that you need to pull from your emergency fund or other savings accounts.
If you decide to do that, be conservative about how much you use, and make a plan for replenishing it when your income stabilizes again.
Ideally, you want 3-6 months of expenses set aside in case of another unexpected situation.
The CARES Act lets those under the age of 59 ½ take a distribution of up to $100,000 from their 401(k) without paying a 10% penalty.
Be sure to talk with a financial professional about your options before withdrawing money from your retirement accounts.
Prioritize Debt
While it might be hard to make debt payments on top of your other bills, you need to stay on top of high interest debt, like credit card debt.
We waste the most money on high interest debt, so don’t let that pile up right now.
I recommend using the avalanche method. Start by organizing your debt by interest rate. Prioritize your debt with the highest interest rate while still making minimum payments on the rest.
Once that debt is paid, move to your next highest interest rate.
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