As the economic fallout from the pandemic triggers record unemployment and devastates the finances of families across the country, Taking Action Reporter Jackie Callaway spoke to experts on how consumers can find ways to save money now.
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As the Tampa Bay area waits for the coming rebound, everyone needs to focus on what their family needs to survive in the meantime, according to personal finance expert and author Rachel Cruze.
“The first four things you want to pay for is food, shelter, utilities and transportation,” said Cruze.
But that’s easier said than done, according to Michelle Sellars of Spring Hill.
Sellars told ABC Action News a furlough left her family of four unable to make all their monthly payments.
“It was huge. It was almost $700 a month (in lost income),” said Sellars, who prioritized groceries and electricity over other bills.
Cruze advises those struggling to negotiate with creditors now.
“Don't wait until the bill is due,” said Cruze. “Go ahead and call them and communicate with them.”
But what about if you fall behind on the rent and mortgage payments?
Florida Governor Ron DeSantis has suspended evictions, and many lenders are offering forbearance, which means you can defer your payment for up to several months.
Credit Counselor Emanuel Rivero with Money Management International warns not all lenders have the same policy when it comes to paying the money back.
“At the end of a forbearance period, you are… either likely to come up with a lump sum of those missed payments or come up with some sort of repayment plan,” said Rivero.
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In Sellars’ case, her bank quickly approved a two-month deferment on her home loan.
“There was no problem – called the mortgage company, filled out the paperwork,” said Sellars.
When it comes to car loans, some – but not all – auto finance companies are offering to let drivers to defer one or more payments or tack skipped payments on to the end of the loan.
Sellars said her family still has two vehicles that are not yet paid off. The first lender, Honda, approved two deferred payments over the phone.
But the other auto lender sent a letter notifying Sellar of “additional interest” and a “balloon payment” if they missed even one payment.
Sellars said that penalty would amount to thousands of dollars over the next four years.
“How are we going to make a payment like that? It's just impossible, insane, there's no way,” Sellars told ABC Action News.
Regardless of whether an auto lender is willing to work with a customer or not, Cruze said drivers who own any vehicle that’s worth half of their annual take-home pay should trade it in for a cheaper model.
“I would rather you have something you can afford during this time than something that is putting you underwater,” said Cruze.
Rivero suggests delaying bills for nonessential items first.
“If things such as your credit cards, your student loans are able to be deferred, see if you can do that first so that you are still able to make your housing or your mortgage payment,” said Rivero.
ABC Action News discovered credit card issuers, including Capital One and American Express, are allowing customers to skip one monthly payment without penalty.
Major cell phone carriers are also willing to be lenient on bills. AT&T said it won’t shut off your service for nonpayment, while Verizon and T-Mobile are waiving late fees and offering to work with customers.
Money Management International, a nonprofit, offers free credit counseling with no obligation to sign up for a debt management plan. To learn more, visit www.moneymanagement.org/coronavirus.
And you'll find a free budgeting online tool/app from Ramsey Solutions. It helps allocate every dollar for your family's needs. Visit, www.daveramsey.com/store/product/everydollar-budget-app for more details.