14 Money-Smart Ways to Spend Your Coronavirus Quarantine
For many Americans, quarantine is likely our reality for the next several weeks -- or longer. For some of us, it’s business as usual albeit working from home. For others, it may feel like Groundhog Day, caught in a time loop, repeatedly reliving the same day. After you have binge-watched Netflix or Hulu, here are some other ways you might consider spending your time –
#1 - Organize/Share Financial Accounts and Passwords
Consider assembling all your accounts, passwords and points of contact. Couples might perform this task together and point each other to locations of key files and passwords. In addition to must-have documents—a will, powers of attorney, trust, bank and investment accounts—also consider facets of life other than financial: Where is the warranty for your new stove? The title to your cars? The names of your plumbing or HVAC repair person?
#2 - File Your 2019 Taxes
With everything else that's going on, at least you don't have to worry about filing your tax return by April 15th. The IRS extended the deadline to help taxpayers, and tax preparers, who are struggling with the coronavirus crisis. The new deadline is July 15, which applies to both return filing and tax payments. Penalties and interest won't apply if you pay any tax due before the extended deadline. This relief also applies to 2020 estimated tax payments that would otherwise be due on April 15.
Make sure you check with your state's tax agency to see if the filing and/or payment deadline for your state income tax (or other state tax) is changed because of the coronavirus crisis.
#3 - Use Your 2019 FSA Funds Before You Lose Them
If you have a health care flexible spending account (FSA), review its balance and rules. Most accounts require that you forfeit anything left over at year-end. Some will either allow you to carry over up to $500 or offer a grace period for claiming expenses for the previous year. Many plans’ grace periods just expired on March 15; if that’s the case, then your quarantine-time assignment is to plan your 2020 FSA spending and to set a calendar reminder in early 2021 to make sure you use all your saved funds.
#4 - Build an Investing Plan, and Rebalance as Necessary
Investment plans are designed to meet your goals and your tolerance for risk. Given the recent market volatility, has this changed? Do you believe the investment markets will recover? If so, you might consider rebalancing your portfolio at this time. Rebalancing works by trimming overweight asset classes and adding to underweight asset classes.
#5 - Earn Some Extra Cash
There are several legitimate moneymaking opportunities for you to capitalize on at your convenience, with the perk of no long-term commitment and, in most cases, setting your own hours.
For instance, you can search for unclaimed property in your name – this was highlighted in our January newsletter. It can also be found by clicking here.
Another quarantine-time winner: Earn $5 to $60 per case as an “online juror” helping lawyers to sharpen their cases.
Kiplinger offers a list of other ways to earn some extra money - 15 Safe Ways to Earn Extra Cash in the Age of the Coronavirus.
#6 - Streamline Your Finances
Find ways to make your financial life a little easier. Are there accounts that could be consolidated – think old 401(k) plans or smaller IRAs you may have setup a long time ago. Maybe there is an opportunity to combine your liability insurance policies or consolidate your credit-card balances.
#7 - Freeze Your Credit
A credit freeze prevents new creditors from reviewing your credit report, making it harder for identity thieves to take out credit in your name. For it to be effective, you’ll need to contact each of the credit bureaus separately to initiate a freeze. Both placing and removing a freeze are free.
Once you request a freeze either online or by phone, the new law requires the credit bureaus to implement it within one day. And if you ask for the freeze to be lifted, the credit bureaus have one hour to do it.
#8 - Open an Online Social Security Account
It’s smart to set up an online account with Social Security even if you’re years from retirement. Once you’ve done so, identity thieves will be unable to create a fraudulent account in your name and use it to apply for benefits. In addition, you can check your earnings history against your W-2 forms or tax returns to make sure there are no gaps in your earnings record that could reduce your Social Security benefits. You can also look up estimated retirement, disability and survivor benefits and, in certain cases, request a replacement Social Security card.
To set up an account, go to www.ssa.gov/myaccount. You’ll need to enter some personal details, answer some questions to confirm your identity, and choose a unique username and a complex password.
#9 - Protect Your Passwords
Security experts have warned for years that to protect our online accounts we need to change passwords frequently and make sure that those passwords are "complex"—meaning filled with letters, numbers and random characters. Yet many people continue to rely on weak passwords, such as "123456," "password" and "qwerty." And even the best passwords are easily compromised if you write them down.
Consider using a password manager that will store all of them behind one master login—the only password you'll need to remember. A password manager can also help you create strong, unique passwords for each of your accounts. Passwords generated by the service will still be long, unpredictable and impossible to remember. But that's okay because you'll never need to type them in yourself.
To add another layer to your security network, enable two-factor or multistep authentication on any account that allows you to. You'll enter your username and password as usual, but the account will then confirm your identity each time you log in by asking you to enter a code that has been sent to your smartphone or e-mail address. The extra step deters hackers, and you'll know if an intruder attempts to log in with your password.
#10 - Swat Away Pesky Fees
No matter how much you try, pesky fees continue to nibble away with your travel bookings, wireless phone plans, bank accounts, and pretty much every other part of your financial life. Although the fees may not seem like much on their own, they can add up to hundreds or even thousands of dollars a year, putting a big dent in your wallet. Invest a few minutes to eliminate even just a few fees in your life, and you’ll reap the benefits month after month.
#11 - Find a Better Job
You may already need a new job, or maybe you're worried about the stability of your current one in this expanding crisis. Start your search now, while you have the freedom at home to do so. We recommend tapping into your network: Connect with former colleagues and industry peers over e-mail and on LinkedIn, and give them a call. People may really relish the human interaction with you during this time.
#12 - Review Your Credit Reports
If you haven’t reviewed your credit reports lately, head to www.annualcreditreport.com, where you can get a free report from each major credit bureau—Equifax, Experian and TransUnion—every 12 months. Look for suspicious changes, such as a credit card account or mailing address that you don’t recognize, which could mean you’ve been the victim of ID theft.
If you already claimed your annual reports, there are other ways to view your reports for free. By creating an account at https://my.equifax.com, you can access an Equifax report and VantageScore credit score monthly. With Experian’s www.freecreditscore.com, you can see your Experian credit report and FICO score monthly. And TransUnion’s www.trueidentity.com allows you to pull up an updated TransUnion credit report daily.
#13 - Call Your Creditors
It's important to keep your creditors informed of your changing situation. So, if you do hit a financial crisis, your mortgage lender, bank and credit card issuer may let you pause or lower your payments. Wells Fargo and Bank of America offer forbearance plans that allow customers facing a temporary financial hardship, such as a layoff, to suspend or reduce their mortgage payment. American Express and Discover offer payment-assistance programs tailored to individual situations that could temporarily lower the interest rate, waive late-payment fees or lower the monthly payment on credit cards.
#14 - Insurance Check-Up
The biggest asset most people will ever have is their ability to earn a paycheck. Does your company offer long-term disability insurance? If they do, that's a great start. Understand though that having it at work might not be enough. Often, group plans are limited to 60% of your income up to a maximum $6,000 benefit per month. Also, the coverage is only helpful as long as you stay at that job.
Have you considered life insurance? If you die and your family or anyone who depends on you for support could no longer count on your income, life insurance would replace that income -- assuming you choose a policy with the amount of coverage that is right for you.
Please call us if you feel you need to talk about anything. We are here and willing to help however we can. Our office number is (818) 841-1746.
Disclosures:
The information provided is not a complete analysis of every material fact and are subject to change.
Securities and some investment advisory services are offered through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer and Registered Investment Adviser.
Financial Planning and some investment advisory services are offered through Cameron Thornton Associates, a Registered Investment Adviser.
Cameron Thornton Associates and Cetera Advisor Networks LLC are non-affiliated companies.
The opinions expressed in this letter are those of Cameron M. Thornton, CFP® and Trevor M. Cole, CFP®. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. All economic and performance information is historical and not indicative of future results. Past performance does not guarantee results.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
Dow Jones Industrial Average Index: The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
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Cameron M. Thornton, CFP® is a Representative with Cetera Advisor Networks LLC and may be reached at www.cameronthornton.com or (818) 841-1746.
Citations:
1 - https://www.kiplinger.com/slideshow/saving/T065-S001-money-smart-ways-to-spend-coronavirus-quarantine/index.html