Ep. 376: Shoring Up Finances In The Economic Downturn

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People are feeling the pain all over. Peter and Damian discuss stories of the current reality onset by the strange mix of the economic recession and COVID-19 pandemic.

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No time to listen? BUMMER. Here’s some of what happened:

Show Notes:

Story Time!

    • Article: “Survey: Many in United States Shoring Up Finances Amid Downturn.”It’s the paradox of a pandemic that has crushed the U.S. economy: 12.9 million lost jobs and a dangerous rash of businesses closing, yet the personal finances of many Americans have remained strong—and in some ways have even improved. A new poll…finds that 45% of Americans say they’re setting aside more money than usual. 26% are paying down debt faster than they were before the coronavirus pandemic. In total, about half of Americans say they’ve either saved more or paid down debt since the outbreak began. Kent Sullivan, a landscape painter from Orlando, Florida, has been making extra mortgage payments.
      • Pete: There is a right way and a wrong way to do it. You don’t get flexibility by making extra mortgage payments during a pandemic. Paying off your mortgage quickly doesn’t always make sense.
      • Damian: “What’s this guy’s emergency fund look like?” He’s an older gentleman, if he’s got the cash flow, maybe there’s a reason to do this going into retirement, IF the emergency fund is there.

Student Loan Refinancing:

    • “Both my wife and I lost our jobs when the pandemic hit. We previously had a household income of $165k. I’ve been able to get a job for $15 per hour while I look for jobs more consistent with my skills and experience. My wife is coordinating our kids’ virtual learning so it’s difficult for her to find work. I’m also going to look into a second job on nights or weekends. We might have to dip into our retirement savings or we won’t be able to make our mortgage payments.  Are we crazy for doing that? I want to make sure I’m thinking clearly.
      • Pete: I’m sorry, John, that you’re going through this. Don’t feel the pressure to let this moment in history to define your character. But the fact that he’s willing to do whatever it takes to care for his family demonstrates his character. The CARES Act makes this a much less risky move.
      • Damian: We’ve made it almost taboo to withdraw from retirement accounts for any reason other than retirement. In this case, you’re forced to look at the resources that you’ve got.

 

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