Well, it’s been a crazy few weeks to say the least. But we’re all doing it. We’re making it through the coronavirus (COVID-19) saga one day at a time. Still, there’s no denying that the effects of the coronavirus (and the economic fallout from the cure) are in full force and hitting us in our daily lives, routines and bank accounts.
So, what are you supposed to do if you’re still in the middle of the storm? The government stepped in to help people out with stimulus checks, and now it wants to do it again with a second stimulus bill, but will that make a difference? Here’s what you need to know about the coronavirus stimulus plans (yep—both of them), plus how to make it to fight another day without depending on the government to see you through.
What’s in the HEROES Act Stimulus Plan?
This new stimulus plan—aka the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act—has a lot of similarities to the CARES Act (more details on that later) but also a few key differences.
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One major difference? The HEROES Act clocks in at $3 trillion for total cost (that’s $1 trillion more than the last stimulus). This time, there’d be a payout of $1,200 for each family member in the household (capping off at $6,000 total). Along with that comes $10,000 in student loan forgiveness for those who were already struggling (but you’d have to meet a list of specifics to even qualify for that aid). It’s also extending the deadline for unemployment benefits through the New Year. And rounding out some of the final details are $200 billion for hazard pay for essential workers, $175 billion for rent and mortgage assistance, and $75 billion for coronavirus testing.1,2 Yep, that’s a lot of dollar signs right there.
So how likely are you to actually see any of this money? It’s not looking too good in that department. Even though the bill passed the House, it still has to go on to pass the Senate and be signed into law by the president. And the Senate won’t be back together until June to even vote on it. So at this stage in the game, the HEROES Act could go through a lot of twist and turns—and the bill might get shot down completely. But if it does get passed into law, don’t expect to see another stimulus check until sometime in late June or July (maybe even the fall if you’re someone who hasn’t received their first stimulus check yet).
What Was in the CARES Act Stimulus Plan?
This latest stimulus bill isn’t anything new. Back in March 2020, the U.S. government tried to do something to balance out the amount of hardship on Americans, encourage the economy to spring back, and aid small businesses. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was the government’s answer to those needs. But it didn’t come cheap. Nope. When it was all said and done, the bill for the first economic stimulus package added up to a price tag of $2 trillion. Of that, it’s estimated $560 billion went to individual Americans, $500 billion went to large businesses, $377 billion went to small business loans, $340 billion was sent to state and local governments, and $154 billion went toward public health efforts.3
So how much of it were you supposed to actually see? Here’s how it all breaks down:
We’re about to throw even more numbers and dollar signs at you. Ready? Here we go: Under the CARES Act, individuals who filed taxes in 2018 or 2019 would receive $1,200 for each adult and $500 for each child. If you’re a household of two adults and two children, your amount would be $3,400.
To qualify for full aid, your adjusted gross income (your income before taxes) would need to be under $75,000 for each individual, $112,500 for head of household, or less than $150,000 for each married couple filing jointly.4
If you make more than those limits, the check amount would be $5 less for every $100 that your income goes over the limit. So yes, some folks got very small amounts in their checks, and taxpayers (without children) with incomes of more than $99,000 (individual) or $198,000 (married) weren’t eligible at all.5
With 78% of Americans living paycheck to paycheck, this coronavirus stimulus may have helped keep food on the table and the lights on—but at the end of the day, if you’re out of work, $1,200 isn’t going to go that far for that long.6 The bill also provided some relief to those who’ve had the virus (or are unable to work or find childcare because of the virus) and want to draw from their 401(k) account. They can now do it without being slapped with a 10% early withdrawal penalty—the fee is completely waived. But trust us, you don’t want to pull from your 401(k).
What Should I Do With the Stimulus Money?
First things first: If you’re someone who’s out of work or missing a paycheck, use this stimulus money to protect your Four Walls:
If you’re having trouble keeping food on the table right now, use some of that stimulus money to keep the mouths in your home fed. After that, make sure you can keep the lights and water on. And on a lighter note, if you have kids at home, your sanity will appreciate having the ability to turn on the DVD player too.
After that comes your home. Whether you’re paying rent or a mortgage, make sure some of this money covers the roof over your head. Right now, the U.S. Department of Housing and Urban Development (HUD) has said that all foreclosures and evictions are suspended through the end of June 2020, so you don’t have to have that hanging over your head.7
Maybe your job is safe and you feel like it’ll stay that way throughout this coronavirus chaos. First, thank the Lord for that blessing, and then go ahead and put it toward attacking whatever Baby Step you’re on.
Don’t Wait on a Check From the Government to Bail You Out
Everyone likes the idea of money falling from the sky—in theory. And if you’re really in a bind right now, then stimulus money might be a real answer to prayer. But don’t wait around on the government (who’s already in debt!) to bail you out here. Some people are still waiting around for their first stimulus check to show up! And the odds are this second stimulus check won’t even happen. So don’t rely on any of that. There are things you can do right now to make it through these crazy days without depending on the government to save you.
Let’s be honest, social distancing can do a lot of good for your budget. After all, a lot of places that could tempt you into spending are actually closed (or reopening very slowly), and that’s good news for your wallet.
Be proactive and see where else you can cut back. Pause subscriptions, buy only essential items, and live off of the groceries in your pantry.
If you don’t know where to begin when it comes to figuring out what to cut, you need a budget, my friend. And it’s not complicated to do. You can get started right now with our free budgeting app, EveryDollar.
Think About Your Situation
If you’ve lost your job or know a job loss is coming—pause your Baby Step and focus on saving up as much cash as possible right now. Stop making extra payments on your debt (but if you can, continuing making the minimum payments so nothing goes into default). We know it really stinks to bring all your momentum to a standstill, but you’ve made great progress, and now it’s time to put things on hold and pile up cash until this storm passes.
If you’re still employed and your job looks stable, keep going forward. You don’t need to pause your debt snowball. Just keep working the steps like you normally would.
If you’re on Baby Steps 4–7, continue right on with your investing. Do not—we repeat—do not pull out your investments! You won’t feel any of these “losses” on your investments unless you cash out the money. So don’t listen to what some news reporter or that guy in line at the grocery store told you to do. Just keep a level head, stay on that investing roller coaster, and reach out to your investment professional if you need to talk things out. And most of all, be glad you’re in a less shaky place than others right now. You have peace of mind from sitting on an emergency fund, but what about everyone else you know around you? What ways can you bless them in this time of crisis? Look for ways you can be generous in the midst of these uncertain times.
Maybe you’re thinking, What the heck? I have no idea what kind of “baby step” I’m on or where I’m at with my money right now. You’re not alone in that. Take our quick, three-minute assessment to get started with a customized plan.
Adjust Your Budget
Between having the kids home for meals and stocking up on beans and rice, it’s safe to say your grocery budget is going to look a lot different these days. And that’s okay! You might want to move any money that would normally go toward eating out, entertainment or special activities over to your food budget for the time being. The most important thing is that you keep your family fed and then go from there with the Four Walls. Adjust your budget as you need to right now.
Look for Work Anywhere
If you’re out of work because of the coronavirus madness, we know you’re hurting. This thing has affected almost every aspect of our lives, and for some of us, even our paycheck. But there’s a great place to go when you’re broke—to work!
Believe it or not, places are hiring right now. After announcing they were adding 100,000 jobs back in March, Amazon actually went on to hire 175,000 people.8 And grocery stores like Kroger and Safeway are hiring stockers and cashiers to keep up with all the demand (someone has to restock all that toilet paper, right?).9
If you’re someone who doesn’t want to come into contact with people right now (we don’t blame you), you can still deliver for places like Shipt, Amazon, Grubhub or Postmates. Most people ordering delivery right now don’t want to come into contact with you either, so you’ll probably be doing a lot of doorstep deliveries.
And don’t forget the kids in all of this. Schools are shut down and summer’s around the corner—and that means there are all kinds of opportunities for tutoring and childcare. Maybe your neighbors have to go back into work and they have no one to watch the kids. Offer to babysit while they head off to work!
Bottom line here? Stimulus or not—either way, you still need to have a plan.
Don’t wait around for the government to cut you a check. You can get started on taking matters into your own capable hands right now! The truth is, the money from both of the coronavirus stimulus plans isn’t going to be enough to fix everything. It’ll sure help, but it won’t solve all your problems. You’ve got to get your income up, and that’s possible—even in these weird times we’re living in.
Keep Your Spirit Up
It’s easy to feel like we’re all living in the middle of some science fiction novel right about now. Things are weird. We all see it. We all feel it. But don’t let that drive you to make poor decisions in an already heated time. Run as far as you can from anyone trying to get you to take on a personal loan or reach for a credit card. You don’t want to make a rough situation even worse here.
If you’re looking for hope and help as you manage your money through this weird time, check out our free 14-day trial of Financial Peace. Now’s the perfect time to focus on getting things right with your money. Nearly 6 million people have learned how to stop living paycheck to paycheck with this program. And you could be next!
They might have cut your job, closed your business, or quarantined you, but do you know one thing that no one can take away from you? Your spirit. The human spirit is resilient, and it shines like none other during trying times of chaos, times like these. So get off social media, turn off the news, and tap into things that bring you joy and hope. Feed your spirit. Be a beacon of light to everyone you come into contact with—but stand at least 6 feet apart.