About 52% of Americans still say that they’re being financially impacted by the coronavirus pandemic, according to survey data from TransUnion. While some of those affected have been able to find new jobs or rely on unemployment benefits to see them through, 75% are worried about paying their bills.
That may be especially true with Congress failing to pass any of the proposed additional relief packages over the summer. In the interim, the $600 enhanced weekly unemployment benefits expired and the $300 boost spurred by President Donald Trump’s executive order only lasts six weeks.
Although unemployment benefits have been trimmed, there are other programs still operating that can help Americans stay current on their bills and loans. Below, CNBC Make It rounded up a list of resources and information that may be helpful for those struggling financially right now.
A federal eviction moratorium put in place at the beginning of the coronavirus crisis in the U.S. expired at the end of July, but the Centers for Disease Control and Prevention issued an eviction moratorium that runs through the end of the year. It applies to individuals expecting to earn less than $99,000 and couples expecting to earn less than $198,000 in 2020 who can demonstrate they cannot pay rent due to the coronavirus and that they already “used best efforts” to apply for aid. However, many of the details are still being ironed out.
Here are some resources to consider for renters:
If you are worried about eviction, it is important to know your rights. It is illegal for your landlord to kick you out of your home for nonpayment of rent without first going through your state’s formal eviction proceedings, including giving you notice that you are being evicted.
The Federal Housing Finance Agency announced in August that multifamily property owners with mortgages backed by Fannie Mae or Freddie Mac that enter into forbearance programs need to inform tenants of their rights. Additionally, while in forbearance, landlords must agree not to evict tenants for not paying rent.
Laws vary drastically depending on the state and even the city you live in, but the formal eviction process can take weeks or months. During that time, you can stay in your home. And you should, Cea Weaver, statewide campaign coordinator for the Housing Justice for All coalition, previously told CNBC Make It.
Local housing nonprofits or rental assistance programs may be able to help.
Contact a local tenant’s organization or legal aid society to get free help if you’re facing eviction. Relief organizations are local and you can search for a tenant’s organization in your area.
Legal Services is an independent nonprofit that helps low-income households with issues like eviction.
Here are some resources to consider for homeowners:
First, figure out if your mortgage is federally backed, as that may entitle you to more protections. You can use tools developed by Fannie Mae and Freddie Mac to find out.
If your mortgage is held by a private lender, here’s a list of mortgage relief programs offered by 12 major banks, as of July 2020.
If you’re struggling with your mortgage payments, the Consumer Financial Protection Bureau offers a Find a Counselor tool, which provides a list of counseling agencies that can help advise on loan terms, credit issues and foreclosure.
The U.S. Department of Housing has a database of approved organizations that offer foreclosure avoidance counseling.
About 10% of Americans, 22.3 million, reported they sometimes or often didn’t have enough to eat within the past week, according to the Household Pulse Survey for the week ending August 31. The Center on Budget and Policy Priorities estimates that up to 17 million children are living in households where they can’t get enough food.
Apply for the Supplemental Nutrition Assistance Program, better known as SNAP, through your state agency. Eligibility requirements vary by state, but typically your household has to be at or below 130% of the poverty line. For a family of three, that’s a gross income of about $28,200 a year.
Young families may qualify for the Special Supplemental Nutrition Program for Women, Infants and Children, popularly known as WIC. To qualify, you generally need to have been deemed at “nutritional risk” and have a gross household income at or below 185% of the federal poverty level. That’s just over $37,000 annually for a family of three.
Food pantries, such as those supported by Feeding America, may be able to help. The organization, which supplies 4.3 billion meals each year through food pantries, has a helpful lookup tool that shows its network of 200 food banks and 60,000 pantries and meal programs around the country. In many cases, you do not have to be eligible for SNAP in order to qualify for pantry services.
The Homeless Shelter Directory, FoodPantries.org and FreeFood.org also have addresses, websites and contact information for soup kitchens, food pantries and food banks by city and state.
Little Free Pantries, a grassroots mini pantry movement where neighbors stock pantry items for those in need to take, may be another option.
If you have school-aged children, many schools are offering free grab-and-go meals to students. Additionally, some states have been approved to offer the Pandemic EBT (P-EBT) assistance in August and September. The program provides families with a voucher to purchase groceries to replace the breakfasts and lunches their children were missing with schools operating virtually.
If you’re worried about paying your utility bills, contact your provider. While some providers’ Covid-19 specific programs ended in June, other companies extended their assistance. You may be able to defer utility bills through the assistance programs most companies offer year round, including major providers such as ConEd, Duke Energy, FirstEnergy and PSE&G.
Call your provider directly to determine what options are available to you right now. Assistance varies by company.
The Low Income Home Energy Assistance Program (LIHEAP) is a federal program for low-income families that helps with energy bills. While income eligibility requirements vary by state, generally a four-person household earning less than $36,400 qualifies. You can call the National Energy Assistance Referral (NEAR) hotline toll-free at 1-866-674-6327 to get information on where to apply for LIHEAP.
UtilityBillAssistance.com provides a state-by-state breakdown of available grants, programs and even charities where you may be able to apply for payment assistance.
If you’re struggling to pay your phone bill, the Federal Communications Commission has a program called Lifeline that provides discounted landline or cell phone service to low-income families.
The federally funded Temporary Assistance for Needy Families (TANF) program can provide assistance with basic needs such as housing, food and utilities, as well as offer services focused on child care, job training and transportation. Each state runs its TANF program differently, but you can look up each program by state to determine what types of assistance are offered and if you qualify.
Credit cards and loans
Major banks, including Capital One, Chase, Citi and Wells Fargo, are encouraging any customers facing economic hardship to enroll in payment assistance programs. These are not automatic, so you will need to enroll each auto loan, personal loan or credit card that you want help with.
In addition to suspending payments temporarily, you may be able to sign up for a hardship plan, which could mean lower interest rates or smaller fees and penalties for a time.
If your bank doesn’t have a formal program, the National Consumer Law Center recommends sending hardship letters to lenders to see what your options are. The NCLC provides this sample hardship letter.
The coronavirus relief package passed in March, known as the CARES Act, allowed federal student loan borrowers to temporarily suspend payments and dropped interest rates on federal loans to 0%. These protections were set to expire Sept. 30, but President Trump signed an executive order in August that extends the payment pause through January 2021. The CARES Act only provides payment suspension for federal loans owned by the Education Department. These protections do not apply to private loans.
Through the end of the year, if you want to suspend your payments, make sure you turn off the autopay feature on your federal student loans. If you have lost your job or experienced a change in income, you may want to consider enrolling in or recertify your income-driven repayment plan.
To help enforce the protections granted under the CARES Act, the National Student Legal Defense Network created template letters you can send to your loan servicer if you want to continue paying your loans and have those payments applied to the principal and if you’re seeking a refund of any payments you have made since March.
If you’re not sure if you have a federal student loan owned by the Education Department, you can look it up on the National Student Loan Data System website or by calling 1-800-4-FED-AID.
If you’re a resident of California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, New York, Vermont, Virginia or Washington, you may be able to suspend private student loan payments. These states reached agreements with several of the largest private student loan servicers and are allowing borrowers to request a 90-day forbearance. You can apply for this forbearance by contacting your loan servicer.
If you’re not covered by any of these protections, you can reach out independently to your loan servicer to see if there’s any assistance they can offer. Navient, for example, is offering short-term forbearance for at least a month for qualified borrowers who request it after July 1, 2020.
As many as 12 million Americans may have lost health insurance since the start of the coronavirus pandemic, according to a report published in August by the Economic Policy Institute. That’s because many Americans get their health insurance through their employer, so high levels of unemployment are affecting access to health insurance.
If you’ve lost your job and your health insurance, don’t simply sign up for coverage offered under Consolidated Omnibus Budget Reconciliation Act, better known as COBRA, without doing your homework. This can be an expensive option because it keeps you on the same plan you had when you were employed, but instead of your employer covering a portion of the cost, you’re on the hook for the entire amount yourself.
Check out your state’s health insurance marketplace for less expensive options. You have two months, 60 days, after you lose coverage to enroll in a marketplace plan.
Depending on your situation and where you live, you may qualify for Medicaid. This is a federal program that provides health coverage for low-income families and children, pregnant women, the elderly and people with disabilities.
There are also health centers around the country that offer low cost and no cost health care services. The Health Resources and Services Administration has a locator tool to help find a clinic in your area.
If you don’t need to see a doctor in person, several telemedicine services have been offering free health care during the pandemic.
For those struggling to afford their prescription medications, PhRMA has a Medicine Assistance Tool that provides information about assistance programs. RxAssist.org also maintains a comprehensive directory of drug assistance programs.
Also check out Free Drug Card, which is a prescription assistance program that’s accepted at most major pharmacies and can save you up to 75% on medication costs.
For those facing unemployment, child care may not seem like an essential expense. But it may be difficult to return to work or find a new job without it. Many states and local municipalities offer subsidies and grants that can help families pay for child care.
Check out Childcare.gov’s rundown of child-care resources by state.
Local child-care resource and referral (CCR&R) agencies can also provide referrals to providers as well as information on how to get help paying for care. Child Care Aware offers a helpful lookup tool by ZIP code.
Early Head Start (for infants to children up to 2 years old) and Head Start (for children ages 3 to 5 years old) are federally funded programs generally available for families at or below the poverty level. You can find and apply for a center near you by using the the Head Start Locator or by calling 1-866-763-6481.
Some child-care providers may allow families to pay on a sliding fee scale based on their income. If you’re looking for child care, you can ask providers if they offer this, or if they have payment plans or other assistance programs.
If you’re a member of the military, you may be eligible for fee assistance or other discounts. Child Care Aware has a list of providers and resources.
The post A guide to resources that can help you pay bills now, from rent to health care appeared first on AAOA.
Original Source: american-apartment-owners-association.org
One of the most exciting parts of becoming an adult is moving out of your old place and starting your own life. However, as is the case with most major life events, moving out comes with a lot of added responsibility. Part of this duty is knowing and understanding your budget when shopping for the perfect apartment, condo, duplex, or rental house. So how much should you really spend on rent?
The 30 Percent Threshold
The first step in deciding how much you should spend on rent is calculating how much rent you can afford. This is done by finding your fixed income-to-rent ratio. Simply put, this is the percentage of your income that is budgeted towards rent.
As a general rule of thumb, allocating 30 percent of your net income towards rent is a good place to start. Government studies consider people who spend more than 30 percent on living expenses to be “cost-burdened,” and those who spend 50 percent or more to be “severely cost-burdened.”
When calculating your income-to-rent ratio, keep in mind that you should be using your total household income. If you live with a roommate or partner, be sure to factor in their income as well to ensure you’re finding a rent range that’s appropriate for your income level.
If you’re still unsure as to how much rent you can afford, consider an affordability calculator. Remember to consult a financial advisor before entering into a lease if you’re unsure if you’ll be able to make rent.
Consider the 50/30/20 Rule
After you’ve set a fixed income-to-rent ratio, consider the 50/20/30 rule to round out your budget. This rule suggests that 50 percent of your income goes to essentials, 20 percent goes to savings, and the remaining 30 percent goes to non-essential, personal expenses. In this case, rent falls under “essentials.” Also included in this category are any expenses that are absolutely necessary, such as utilities, food, and transportation.
Let’s consider a hypothetical situation in which you make $4,000 per month. Under the 50/20/30 rule with a fixed income-to-rent ratio of 30 percent, you have $2,000 (50 percent) per month to spend on essential living expenses. $1,200 (30 percent) goes to rent, leaving you with $800 per month for other necessary expenses such as utilities and food.
Remember to Budget for Additional Expenses
Now that you’ve budgeted for rent and essential utilities, it’s time to make a plan for how you’re going to furnish your apartment. One of the biggest shocks of moving out on your own is how expensive filling a home can be. From kitchen utensils to lightbulbs and everything in between, it can be pricey to make your space perfect.
For the most part, furniture falls under the 30 percent of personal, non-essential expenses. Consider planning ahead before a move and saving for home goods so that you don’t go into major debt when it comes time to move out.
Be on the Lookout for Savings
If your budget is slightly out of reach for your dream apartment, try to nix unnecessary costs to see if you can make it work. Look for ways to cut down on utilities, insurance, groceries, and rent.
Utilities: Water, heat, and electricity are all necessities, but your TV service isn’t. Cut the cord on TV and mobile services that may not serve you and your budget anymore. Consider swapping out your light bulbs for eco-friendly and energy-efficient light bulbs to cut down your electric bill.
Insurance: Instead of paying monthly renters insurance rates, save a fraction of the cost by paying your yearly cost in full. If you have a roommate, ask to share a policy together at a premium rate.
Groceries: Swap your nights out for a homemade meal. You can save up to $832 a year with this simple habit change. When grocery shopping, add up costs as you shop to ensure your budget stays on track.
Rent: One of the best ways to save on rent is to split the bill. Consider getting roommates to save 50 percent or more on your monthly rent.
A lease is not something to be entered into lightly. Biting off more rent than you can chew can lead to unpaid rent, which can damage your credit score and make it harder to find an apartment or buy a home in the future. By implementing these best practices, you’ll hopefully find a balance between finding a place you love and still having room in your budget for a little bit of fun.
Sources: US Census Bureau
The post How Much Should You Spend on Rent? appeared first on MintLife Blog.
Original Source: blog.mint.com
Money is a fundamental necessity; we need money for food, for clothing, for education, for healthcare and for sustaining our lifestyles. To make money, we need to put in the dedication and the hard work into our jobs.
We are all so actively engrossed in the process of making more money that we often put other important things like our passions, hobbies, families and friends, in the backseat. Aren’t all those things the very reason we were earning money for, in the first place? What if people could have a secondary, or passive source of income that didn’t require active involvement?
For most people, the concept of passive income has an element of mystery and intrigue to it. For others, it's the way of life. In simple words, passive income is the money earned on an investment — or work completed in the past — that requires little work or no active involvement to generate ongoing revenue.
Active income, on the other hand, is the hard-earned money that one earns in exchange for performing a service. This includes wages, tips, salaries, commissions, and income from freelance projects.
There are many ways to earn a passive income. Display advertising, ebooks, e-courses, YouTube channels, etc. But they require skill, and not everyone is skilled for the same. One surest way of earning a passive income is from wealth, which can be taught using skills and systems.
Having a source of passive income can completely turn things around for people. Think about it — if you could put in some upfront work into a project that would generate income for years to come, would you pass up on that opportunity? If you are inclined to put in the early efforts, passive income could prove to be significantly beneficial.
It could help sustain your lifestyle, and it could give you that extra money you need to buy something you have always wanted. Most importantly, it could give you a financial cushion to fall back on in times of need, such as the present economic downfall due to the COVID-19 pandemic.
You may consider investing your existing wealth in various assets like equity, debt, real estate, gold, and insurance in a way so that you make sure that there is a cash inflow of certain amounts at regular intervals in the form of passive income.
Investing your existing wealth into various assets according to your needs and risk-taking ability and making money out of it is easier than trying to learn a new skill altogether.
However, generating a passive income from existing wealth cannot be achieved through a shortcut. It still requires involvement and hard work in the initial stages, but if you are willing to make the effort, you could end up making money while you sleep. And that’s the goal of passive income.
Ways to earn passivelyInterest earned from investments/lending
Earning interest on investments is one of the most common yet effective forms of earning passively. Most people open Fixed Deposits and start contributing to a retirement fund early on in their careers. The interest earned on investments can add up to a significant amount in the long run.
Contribution in PPF, EPF, NPS, etc. all are classified as long term investing with a goal of regular savings and future income from interest earned. Even lending money just like banks to other institutions in forms of debentures fetches higher rates of return versus the banks.
Also Read14 passive income ideas for earning money as you sleepRental income
While most people invest in property for the outcome of appreciation of property, it is an outcome they can't control. They often forget that making money from rental income is a great way to create monthly passive income.
Although investing in property presents its own challenges, like finding a tenant who can pay the required rent and maintaining the property, it can still be a strong source of passive income and worth the initial effort. One could pull in some significant money in the form of rent money. Investing in stock markets
Dividend stocks are one of the easiest ways for people to create a passive income stream. As public companies generate profits, investors earn a portion of those profits in the form of dividends. Investors can then decide whether to keep the cash or reinvest the money in additional shares.
This style of investments gives investors long term growth along with annual dividends from the companies they have already invested in. Many people nearing retirement like to buy PSU companies that are known for paying high dividends but are weaker in comparative growth.
Also ReadThe science of stock trading during volatile times
Over the last five years, investing in gold has also generated passive income for a lot of people. Investing in gold bonds is a new style of investing, which can fetch from 2.5-2.75 percent yearly interest income, which is at par with the bank interest on many national banks on date.
This is a unique way to not only enjoy the benefits of investing in gold digitally but also getting interest to do so.
Many people consider using the traditional style of investing in insurances as a part of their tax deduction and buy insurance plans that start paying yearly income back to them after a certain time. The most interesting thing about this is that the investment is tax-free, and so is the income received from it. Hence, this arrangement is very lucrative for the individual, especially in the high tax bracket.
Passive versus active incomeUnlike passive income which takes years to build, an active income ensures that you have a consistent income stream and allows you to make money in a short and defined period of time i.e. your salary. Often, an active source of income is necessary in order to lay the foundation for a passive source of income.
For instance, to earn passively from investments, you need to first make enough money to invest. However, a lot of people still look at active income as the only option and are oblivious to the notion of earning passively. In this day and age, people should be looking at both revenue streams in combination.
There comes a point in life when one starts feeling the financial pressure of balancing savings and expenditure. If implemented correctly, passive income can certainly provide that extra stability that one may be looking to achieve.
(Edited by Saheli Sen Gupta)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
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Original Source: yourstory.com