Category Archives: Money Management

Pandemic Money Hacks

As I find money tips that may help through this crisis, I’m sharing them in batches. You can find Batch 1 here.

Here’s what we’ve got in store for Batch 2:

You won’t lose unemployment if your employer illegally reopens in PA.

Governor Wolf.

Through this crisis, he has allowed public health and science to inform his decisions, and as a result, saved countless lives.

He has offered Pennsylvanians the opportunity to do the right thing voluntarily, but has also held businesses accountable when they openly flout the emergency orders put in place to protect the health of our citizens, our healthcare systems and our communities.

And now, he’s out there protecting your unemployment benefits.

Human lives over short-term profit.

Here is the full statement from the governor. Please read it knowing it comes from a twice-democratically-elected governor in a very purple state, regardless of the skewed images you might see on social media.

Basically, about half the state had restrictions partially lifted last week. But that’s not how people here were treating it.

More important to the people of Pennsylvania, that’s not how some employers wanted to treat it. There was this very real, lingering question:

If an employer opens up in an area where it’s been deemed unsafe to work, will you lose your unemployment by refusing to go back into a potentially unsafe environment?

Because maybe, just maybe, you’re not willing to die or kill your grandma for your employer?

The answer is, ‘No,’ according to Wolf’s statement.

At the time of writing this piece, in the state of Pennsylvania, if your business or locality is violating state orders by opening prematurely, you are completely within your bounds to refuse to go in to work. If you stay home, you will continue to be eligible for unemployment benefits.

This is a huge relief for anyone worried about their own health, or the health of the communities in which they live.

It’s a huge relief for the average person struggling economically through this mess as their employers attempt use them as pawns to manipulate financial benefit programs like PPP.

Mortgage Forbearance

If you’re struggling to pay your mortgage, or are a renter who would like to know what your landlord’s options might be before you approach them about a late rent payment, it’s going to be really helpful to understand the mortgage forbearance rules out there right now.

You can find some perspective from Justine at Live with Plum. As she notes, forbearance is not forgiveness; you’re still going to need a plan to pay this off.

If you’re a renter, you’ll want to check the Batch 1 tips to find out why it’s so vitally important to understand your landlord’s options.

Virtual Therapy

This is not a money hack per se. But for all the other moms of special needs kiddos out there, I see you. You’re not invisible, even though I know we sometimes feel that way right now.

I know what little work you may have left is threatened by the hours you now have to spend serving as an untrained and uncompensated educator, therapist and entire social network to your child. The systems that did not do enough to support our children before have now all but evaporated. It’s not your fault.

This is hard.

In our house, we only really were able to start effective teletherapy for some of our services very recently. We are in a position of privilege to even be able to do that.

What has worked for us is engaging the kiddo by screen sharing a video of one of their favorite shows. Then, every once in a while, we’ll take a break to quickly work on one of the therapeutic goals.

We’ve been able to increase the amount of time we spend on the therapy exercises and decrease the amount of time we spend on videos as each week goes on. It’s far from getting back to a functional lifestyle, but it has been forward progress.

Start Looking at Summer Food Programs Now

Even if you didn’t qualify for or rely on the school lunch program before COVID-19, you might now.

At least in Western Pennsylvania, most school districts are distributing food via a basic signup list, waiving income eligibility limits to make sure all the kids have food.

This eliminates a lot of the paperwork barriers that often impede people from getting the benefits they need, and reduces social shaming.

If you’ve never dealt with the school lunch program before, you may not have thought about the summer yet. Luckily, there are summer meal programs across the country funded by the USDA.

Ask your school district about summer meals now. These meals are sometimes administered by community nonprofits and recreational organizations rather than in schools.

But during the pandemic, things have undoubtedly changed.

The USDA provides a searchable map so you can find local sites. But at least here in Western PA, the map is telling me to do the same thing: Contact your school directly.

Traditionally, admission to these summer meal programs required a separate application. In this time of crisis, so much of your eligibility and access is going to depend on decisions made at the local level.

Get in touch with your district to make sure your kids have enough food over the summer. Make your plan now.

Because believe it or not, we’re almost halfway through May.

Do Home Loans Need to Be So Stressful?

This post is brought to you and contributed by an outside writer.

One of the most daunting experiences of adult life is the anxiety-producing home loan. 

The constant hope that you will be able to maintain your income so you can make your mortgage payments on time can create a tension-filled life. 

Many of us sit with mountains of stress over the complications of maintaining and owning a home. It’s not uncommon to avoid financial problems by just hoping it solves itself if we keep making payments. Yet even when we’re avoidant, there’s always that constant worry that if things go wrong it could lead to the possibility of losing the house — despite our best efforts. 

If your mortgage provides more feelings of anxiety than security, it might help to know about the many helpful ways to reduce the stress of having a home loan. Yes, if you are in a bad spot with your mortgage, there is a light at the end of the tunnel.

And it’s not necessarily the headlamp of an oncoming train. 

An Alternative to Foreclosure

There is an option available to homeowners who are no longer able to afford payments for any of several reasons — a way to get out from under the debt that their changing economic situations have left them with. 

If you are suddenly facing an uncertain and financially insecure future and still owe more than your house is worth, foreclosure isn’t the only way out. In cases where you believe a foreclosure to be around the corner, a slightly better options is short sales.

In the Ohio Valley, specialists like those at the Ohio Short Sale Center can help you determine if a short sale is a plausible option for you as a homeowner. You will have to move when your house sells, but it won’t be because the bank is kicking you out. 

In a short sale, the bank allows you to sell your home for less than you owe. The bank is taking a loss and so are you, but it’s better for the both of you than going through the losses that come along with foreclosure. 

Additional Financial Relief Options

More often than we realize, the value of homes can quickly change for several reasons, leaving many homes with a substantially reduced worth and owners with an existing loan that now exceeds the value of the property. Borrowing against your mortgage or property can also put you in a similar situation.

Or simply losing your job due to a pandemic.

You could consider a loan modification. This should be considered as an approach early on, and could involve options such as temporarily reduced interest rates, switching mortgage lenders, or restructuring of payments so the amounts become more manageable during the hardship you face. 

Temporary suspension of mortgage payments is sometimes an available option, but all of these options depend entirely on your financial lender. 

Whatever road you take, do so with the advice of a financial professional who knows the ins and outs of your entire, individualized financial situation. You can get the advice of a HUD-approved financial counselor for little to zero cost.

Learning Is Better Than Worrying

If you ever find yourself stressed out over your home loan or any other part of your financial situation, remember that knowledge is power. In the era of the internet, we’re lucky enough to live in a time when knowledge is literally at your fingertips. 

You don’t have to be great at trigonometry to ‘get’ personal finance, but putting effort into understanding how our finances work is something we can all benefit from greatly.

ABLE to Work Shelters More Money From Asset Tests

In honor of Autism Acceptance Month, Femme Frugality will be hosting a series of Wednesday articles that focus on the financial challenges and triumphs that Autistic poeple face and achieve. While this series is for Autism Acceptance Month, the following information applies to everyone with a disability diagnosed before age 26. Any dollar amounts referenced are for the 2020 tax year.

If you have a disability, the state often disallows you from doing things like building an emergency fund. They prevent you from doing so via asset tests.

Asset tests can prevent you from getting anything from SNAP benefits to Medicaid access.

Luckily, you can get around this asinine hindrance by keeping your money in an ABLE account — a 529 account which shelters your savings from asset tests. An ABLE account also allows your money to grow tax fee.

Qualified withdrawals from ABLE accounts are quite generous compared to a typical 529 account; you can pull money out for anything related to the disabled person’s life without penalty.

The amount you can save in an ABLE account annually is typically limited. But some employed adults can almost double these limits due to legislation called ABLE to Work.

How much can you normally save in an ABLE Account?

Typically, you can save $15,000/year in an ABLE account. Anyone can contribute towards this $15,000 max. It doesn’t matter if it’s you saving, or family and friends contributing towards your account.

How much extra can you save with ABLE to Work?

ABLE to Work is legislation that allows disabled adults with a job to stow away a little extra cash every year.

If you work a job and have an ABLE Account in your own name, you can save over the $15,000 limit with this legislation.

“The contribution limits for ABLE accounts and rules around ABLE accounts are determined by IRS codes,” explains Tricia Rosen of Access Financial Planning.

“The Tax Cuts and Jobs Act of 2017 made significant changes to ABLE accounts. It’s important to keep in mind the provisions of TCJA are only effective through December 31, 2025 at this time.”

So just how much extra can you save with the temporary TCJA changes under ABLE to Work?

That depends on how much you bring in.

Technically, you can save up to the federal poverty line. Right now, that’s an additional $12,490 if you’re in the contiguous US. In Hawaii, the limit is $14,380. In Alaska, it’s $15,600.

If you don’t make that much per year through your job, you can’t put that much in. The max you’re allowed to put in is up to your total annual earnings — as long as those earnings are below the federal poverty line where you live.

What’s the catch?

Yes, there is a catch.

You can only save the extra ABLE to Work amount if you do not participate in an employee-sponsored retirement plan.

Technically, defined contribution plans disqualify you. You might have a defined contribution plan if:

  • The savings burden is put on you as an employee rather than guaranteed by your employer — even though the plan is offered by an employer.
  • The amount you will have to withdraw in retirement is dependent upon your individual savings within this retirement account — combined with market performance.

Some common examples of defined contribution plans that would disqualify you from saving more with ABLE to Work include:

  • 401(k)
  • SEP IRA
  • 403(b)
  • 457(b)

Pension plans don’t count.

However, if you have a defined benefit plan through your employer — such as a pension — you qualify. You will be allowed to save the additional sum every year through ABLE to Work.

At least through 2025.

What if I have an ABLE Account across state lines?

What happens if you live in North Dakota but open an ABLE account from the state of Alaska?

Or live in Hawaii but open an ABLE account from the state of Iowa?

The additional amount you’re allowed to save is entirely dependent on your state of residence — not the state that administers your ABLE account.

That means the North Dakota resident is only allowed to save an additional $12,490. Even if they have an ABLE account from Alaska.

The Hawaii resident, however, would be allowed to save up to an additional $14,380. Even though their plan comes from Iowa in the contiguous United States.

What is the total amount you can save with ABLE to Work?

In 2020, the max allowable contributions including ABLE to Work are:

  • Contiguous US: $27,490
  • Hawaii: $29,380
  • Alaska: $30,600

Remember that if you earn less than the federal poverty line in any given year, your max allowable contribution amount will be less than the maxes available under ABLE to Work.

Additional Tax Benefits of ABLE to Work Act

The ABLE to Work Act — embedded in the TCJA — also allows you to count your first $2,000 of savings in an ABLE account towards the Savers Credit. This credit is typically reserved only for select retirement accounts. But until 2025, ABLE accounts make the cut.

As an individual tax filer, the max credit you could get would be $1,000 if you saved at least $2,000 in an eligible account. The amount doubles if you’re married and your spouse is doing the same thing.

This credit — which can be up to $1,000 — is non-refundable.

Non-refundable credits mean that if you owe the government $0, you can’t cash out the rest of your credit. It can reduce your tax, but it won’t get you cash in your pocket in and of itself.

529 rollovers are temporarily allowed. Well, kind of.

Many families can now also rollover funds from 529 accounts into an ABLE account, but they do have to meet certain requirements.

The real buzzkill on the 529 rollover change is that when you roll the funds over, they count as contributions for the year. So if you rolled over $15,000, you’d be able to contribute $0 more to your child’s ABLE account that year.

ABLE vs SSI Requirements

When your ABLE account exceeds $100,000 in total assets, it will start counting towards SSI asset tests. The max amount you can save in your account total varies by state.

It’s also important to note that SSI requirements are different from ABLE account requirements. SSI runs off of rules set by the SSA while ABLE is in the domain of the IRS. There may be instances where maxing out your ABLE account is detrimental to SSI or other state-administered benefits.

Always be careful to protect your benefits.

ABLE accounts are a great tool and a step in the right direction, but they do not solve all of the systemic financial obstacles the disability community faces.

4 Ways to Fund Emergency Medical Expenses

This post is brought to you and contributed by an outside writer.

Life can be unpredictable and situations can arise that totally throw us off — even those of us who’ve planned for the unexpected.

If you’ve recently experienced an unexpected emergency medical situation that you now have to find a way to pay for, you might be wondering what your options are when it comes to covering the cost. Especially if you’ve recently used your emergency fund for something else.

Take a look at four ways you can fund unexpected emergency medical situations.

1. Earn Some Extra Cash

If you can, find a way to earn some extra cash to cover your emergency medical expenses. These days, there are tons of ways to make money without any experience, such as delivering fast food with Door Dash, Uber Eats, Grub Hub, or Post Mates. You could also deliver groceries with companies like Shipt or Instacart.

Note: During the pandemic, you may decide it makes more sense to take care of your health and not participate in these service-based hustle opportunities.

Or you could complete tasks from your laptop with sites like Task Rabbit, sell on Etsy, walk dogs with Rover, babysit with Care.com, become an online tutor, or rent out a spare bedroom on Airbnb.

Find something you’d be comfortable with to start earning the money you need to cover your medical expenses.

2. Take Out a Personal Loan

Taking out a personal loan is another way to go if you check all three of these boxes:

  • You’re unable to earn extra money.
  • You can’t ask a family member.
  • You’ve got a decent credit score.

Personal loans are not the same as payday loans, which you should avoid. Payday loans are considered predatory and come with jaw-droppingly higher interest rates than traditional personal loans.

Instead, if you must borrow money, turn to a personal loan from a trusted lender. It helps to compare rates (and other factors) from various lenders before you make a decision on where to get your loan funds. That way you know you’re getting the lowest rate possible.

3. Get an Emergency Credit Card

Using an emergency credit card can help you cover unforeseen medical expenses like emergency room visits or unexpected surgeries. If you don’t already have a credit card for emergencies, consider applying for one from a reputable company like USAA. With a USAA credit card, get 2 percent cashback on your first $3,000 you spend on groceries every year.

You’ll also get up to 1.5 percent unlimited cash back on all of your other purchases — including your medical bills. There’s also no annual fee and no penalty APR.

You will have to pay interest, though, as with any credit card. So think long and hard about using one to pay your medical bills. If you can’t afford to pay it off by the end of the month, you could end up paying more in interest than if you had just set up a payment plan with the hospital.

4. Ask for a Payment Plan

Emergency room costs can get as high as $20,000 or more, depending on what you’re being treated for. If you can’t use any of the above methods, consider asking your medical service provider if they can put you on a payment plan so that you can pay off your balance over time.

Ask about financial assistance programs, too, because nonprofit hospital systems are legally required to provide them under the ACA. The income limits may be higher than you think; you should always apply even if you don’t think you’re poor.

Considering Your Options

The above information can keep help you cover unforeseen emergency medical situations that might arise. Figure out which options work best for you and get the process started as soon as possible.

How to Negotiate Your Rent

There’s this super cute meme that makes rounds every once in a while.

It has a different woman looking all tough in the background every time it makes an appearance, but it has the same words almost verbatim every time:

You’re asking if I can negotiate my fees? Yeah, sure, honey, let me just go see if my landlord will negotiate my rent.

I get the point – on a month-to-month basis in the middle of a twelve-month contract, you can’t negotiate the rent with your landlord. And you need to pay your bills so you shouldn’t give discounts to everyone who asks for them when you’re a service-based business.

BUT

I always walk away from that meme asking myself,

How the hell do people not know they can negotiate their rent?

Because here’s the thing: Rent is totally negotiable.

You just have to know when and how to do it.

Know Your Landlord

The type of landlord you have determines what kind of negotiations you can expect to be successful. Whether you’re negotiating one-on-one with a landlord who owns a couple properties or with a large complex, there are ways to pursue the biggest bang for your buck through negotiation.

You can usually negotiate directly with individual landlords or property managers.

Negotiating your rent is going to be easiest with an individual landlord. Though you may also have success with a property manager who takes care of the rental for an individual landlord.

In these negotiations, you’re most likely to be able to reduce the dollars you pay in rent every month.

You can ask for discounts and insights from office staff at larger rental complexes.

If you are dealing with a landlord at a larger rental complex, it doesn’t hurt to try to negotiate the actual rent. But you are less likely to have success.

Instead, talk to someone in the main office. See if there are any discounts available. For example, a certain credit score might get your security deposit reduced. If you move in during a specific month you might get your first month for free. If you have a larger blended family and they want you in the door, maybe you could get more guests added to your pool pass.

You’re more likely to be able to negotiate perks and amenities with larger complexes than the actual rent. It’s going to be more about making friends at the front office and getting them to let you in on the discounts and hacks that already exist within the system they have established for their new tenants.

By all means attempt to respectfully negotiate rent. Especially if you’re negotiating at your lease renewal. But do expect a lower ratio of success than if you try to negotiate monthly payments with an individual landlord.

Know What You Can Afford

Before you go into negotiations, you need to know how much you can afford. Traditionally, it is recommended that your rent and housing expenses take up no more than 25%-30% of your monthly budget.

However, given the housing crisis which continues to afflict this country and the stagnation of wages in America over the past several decades, there’s rarely a way for the average American household to stay within the 25%-30% range and still have safe and healthy housing – especially in urban areas.

Because traditional advice is so broken and incongruent with our lived realities, you’re going to have to figure out what you can afford on your own. If you don’t yet have a budget, you can get a free month of budgeting software for an assist.

You’re probably going to have a hard time sticking within the 25%-30% rule, but you do need to figure out the absolute max you can afford to pay every month and still keep on top of your other bills.

You need this number because when you begin rent negotiations, you need to know where your ceiling is.

When you find it, you’ll need to walk away.

Know What You Want

What you can afford and what you want will be two different things. You want to pay less than you can afford, because that gives you more wiggle room in your budget. Believe it or not, this can actually make you a better tenant because you won’t be stressing as hard about making rent every month. If you manage your money right, it can make you more financially stable.

Maybe you can afford to pay $50 less per month than the asking price, but ideally you’d want to pay $100 less per month. If this is the case, you’d want to ask for more than $100 off per month as you start the negotiations, then work your way to your goal. Maybe you can afford $50 less per month, but they offer you $75 because you started with the goal of $100.

If the landlord refuses to take at least $50 off per month by the end of your negotiations, you can’t move in. Full-stop. You can’t afford it, and if you pretend you can, it’s not going to end well for you or the landlord.

Know why the landlord should negotiate with you.

You do need some leverage in order to be successful in negotiations. Here are some things that will make it easier to successfully negotiate your rent:

  • Are you a good tenant? If you are negotiating with a new landlord, your credit score or history may be important. Landlords want to see you regularly pay the bills on time – including your rent. If you have recommendations from past landlords, this can help you, too.
  • Do you have somewhere else to go? If this is the apartment that’s going to keep you from being homeless, you inherently have less room to negotiate. You can still delicately try, but the inability to walk away means the power dynamics are not in your favor.
  • Time of year. It’s easier to find tenants in the summer. Tenants negotiating winter leases have more leverage. Usually a landlord would rather have someone in the property paying a little less than their asking price every month than have the property sit empty for months at a time.
  • State laws. State laws can affect negotiations, too. For example, if you’re moving in March, but are trying to get a lower rate on your rent, you may offer to extend your lease to 15 months instead of 12 so that your renewal will be in the more desirable summer months for your landlord. However, maximum lease length varies depending on your state’s laws.

Don’t forget the amenities!

If you can’t get the landlord to come down on rent, see if you can negotiate additional amenities. Here are some of the top areas to consider for negotiation:

  • Pet policies. If the property is pet-friendly but you don’t have a pet, see if you can get a discount on your security deposit. Your risk for damage is lower than what they’ve built into their pricing structure, and they may be willing to work with you.
  • Laundry credit. If you’re running on coin-op laundry offered by the landlord, see if you can negotiate a laundry credit into your contract.
  • Storage. If extra storage is a need, can you secure an extra or larger storage unit than what they’re already offering with the property?
  • Parking. You may be able to negotiate any parking fees that are associated with the property. Even if one free spot comes with the property, is there a way to get an additional pass for guests?
  • Upgrades. In larger complexes, renovations usually happen in phases. If the unit you’re looking at isn’t up to the same standards as others going for the same price, you may be able to negotiate lower monthly rent payments or demand those upgrades are made to your apartment before you move in.

Know When You’ll Walk Away

Before you start negotiations, you need to know when you’ll walk away. If you can only afford the rent with a $50/month deduction, be prepared to walk away if they come at you with a rent deduction of only $25/month.

If you cannot walk away, that’s good information to know walking into negotiations, too. It gives you a lot less leverage. But lying to yourself about the power dynamics is not going to make the situation better.

Know When to Make Your Ask

Calling up your landlord to negotiate rent when you’re already under contract is not going to work.

There are two times when you should consider negotiating your rent, though: Before you move in and when your lease expires.

Before you move in.

This is when you have the most leverage – depending on how many other people are showing serious interest in the property.

Before you move in, you’re going to have the most success negotiating a deduction in rent – especially with individual landlords. This is also the time when you’ll be able to negotiate the most amenities and perks into your contract.

This initial contract is likely to be the best deal you get from your landlord. Everything else moving forward will be negotiated with it in mind.

When your lease expires.

If you are a good tenant who has had few to zero complaints and has made on-time rent payments every month, you will have leverage when your lease expires. The negotiations will likely happen in the months before the expiration as your landlord either offers you a lease for the upcoming year – or doesn’t.

If they do and the terms are the same, you might not want to nickel-and-dime them to pay less.

Right or wrong, there’s a general expectation that property values go up over time – especially as safe and healthy housing becomes a scarcer resource. There’s also a general expectation that the landlord will raise the rent, even if the property value and/or taxes haven’t actually increased.

I know.

Fun.

But it’s also the reality we live in.

If your landlord does up the rent or the cost of other amenities like laundry, tenants with a good history may want to negotiate.

Bear in mind that you have a little less leverage than when you moved in. Moving takes kinetic energy, and moving is the only real bargaining chip you have to force the landlord’s hand. If you threaten to walk away at the rent increase, you have to be prepared to actually do it.

Consider what’s currently on the market before you walk away.

You’ll also want to bear in mind what’s currently available on the market. I once lived in an apartment for almost a decade. By the time I moved out, rent had exploded in the market around me, almost doubling. I chose to stay in the same property for many years even though the rent nudged up higher as time went on.

Not because I was completely happy.

But because I could no longer afford to move and stay in the same area of the city where my family had built a life.

However, if you are willing and able to move at the expiration of your lease, you do have a lot of power. A good tenant can be hard to find, and the prospect of not finding any tenant can be scary for a landlord. In these situations, you may be able to negotiate rent increases to a minimum, especially if you’re already paying close to market value.

And remember: After you’ve made a deal, make sure to get every last thing in writing.