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The $600 unemployment boost is likely ending. Here’s how you can access cash now Jul 26, 2020
 

The $600 boost to weekly unemployment benefits will likely end in a matter of days.

That will slash household income for millions, potentially jeopardizing their ability to pay for bills like rent and groceries.

 

In May, the average American got $321 a week in unemployment aid, according to U.S. Labor Department data. (That’s without the $600 weekly federal subsidy.)

More from Personal Finance:
$600 in extra unemployment may fall to $200 or $300 a week
26 million Americans are going hungry
How another stimulus bill could affect your Social Security

That subsidy will effectively lapse after this weekend if lawmakers can’t pass an extension or replacement. A new policy may amount to less than half the amount of current aid.

There are several ways families can make up for an income shortfall, according to financial experts. However, many come with trade-offs.

“People are really going to have to get creative,” said certified financial planner Ivory Johnson, founder of Delancey Wealth Management in Washington, D.C. “I don’t think there are a lot of good options.”

 

Savings

The approaches generally boil down to two general ideas: trimming expenses or turning existing assets into income, according to Jeffrey Levine, CFP, director of advanced planning at Buckingham Wealth Partners in Long Island, New York.

An emergency fund is the first place to look in a cash crunch. This may be a no-brainer: This is a pot of money earmarked for financial emergencies.

This often takes the form of cash in a checking or savings account. Financial advisors typically recommend having three to six months’ worth of living expenses.

But not everybody has an emergency fund. Many who do may have depleted most or all of it earlier in the economic crisis.

Budget

Revisiting your budget, by making a list of necessary expenses (e.g., rent, health care and food) and unnecessary costs, could help free up cash flow, said Karen Wallace, the director of investor education at Morningstar.

That may involve making tough choices and sacrifices, Johnson said. For example, find a roommate to lower rent payments or get rid of one or more cars (and their associated monthly costs), he said.

“Some things have to go,” he said. “If you’re paying $2,000 a month in rent, maybe you move in with somebody.”

It’s also “critical” that consumers proactively contact their creditors and ask for relief, said Jack Gillis, executive director of the Consumer Federation of America, an advocacy group.

“Utility companies, landlords, auto loan and mortgage companies respond much better to requests for forbearance than simply failing to pay your monthly bills,” Gillis said.

If you get relief, you’ll still eventually owe the amounts in question. Outright failure to pay your bills may jeopardize your credit score.

Local and state programs

Gillis also recommended checking with local charities, churches and some schools for food distribution programs. There may be lines for aid, but it’s ultimately worthwhile to keep food on the table, he said.

Some families experiencing a loss of income may be newly eligible for certain federal and state social assistance programs.

They include Medicaid; the Children’s Health Insurance Program; food stamps (formally the Supplemental Nutrition Assistance Program); the Low-Income Home Energy Assistance Program; and welfare (formally called Temporary Assistance for Needy Families).

There may also be state-specific aid available. Pennsylvania, for example, has an Emergency Assistance Program offering eligible families one-time grants for several hundred dollars. (A family of three could get about $806, for example, according to the state’s Department of Human Services.) The state also offers assistance for home energy bills and a food program for children.



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Source: www.cnbc.com
 
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