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8 steps to protect yourself before federal unemployment expires on July 31st

Posted: 23 July 2020 3:10 pm

Unemployed couple looks over their finances

Be prepared — you could lose access to these benefits sooner than you think.

Millions of Americans who lost their job due to the coronavirus outbreak are slated to lose their bonus $600 a week in unemployment benefits when the Federal Pandemic Unemployment Compensation program expires on July 31st.

Congress created the program when it passed the CARES Act, with the expectation that the economy would have recovered by mid-summer. But with no end in sight for COVID-19, many are wondering just how they are going to pay their bills come August.

While it’s possible that Congress will extend more extra unemployment coverage, it likely won’t happen before the end of the month. In the meantime, there are several steps you can take now to protect yourself and your finances before the money runs out.

1. Double check when your federal benefits run out ASAP

Even though the program technically ends on July 31st, you might lose access to the additional $600 earlier. For example, Virginia residents will stop getting pandemic compensation on July 25th. In many other states, the program will end on July 25th or 26th. And New York residents will receive the benefit until the end of the month — but with a delay, due to a processing error.

Everyone who receives this benefit should check with their state’s unemployment department. You’ll find out when the program ends and learn about any hitches so you aren’t caught off guard.

2. Put together a budget for at least three months

Look at your savings, regular state unemployment benefits and any other sources of income over the next three months. Then tally up all regular bills and expenses for August, September and October. And don’t forget any annual subscriptions that you might have to renew during this time period.

While it’s likely you’ll receive more federal aid within the next month, it’s not guaranteed. Three months should have you covered in case anything unexpected happens. After all, this is the year of things not going according to plan.

Owe more than you’ll receive? You’ll need to find places to cut back.

3. Cut out unnecessary expenses

Maybe you’ve already canceled that streaming account you never really use and stopped buying lattes. But now is the time to be a little ruthless. Go over your spending and break out your expenses into three categories: what’s nice to have, what you can live without for a few months and what’s essential. Using a budgeting app to track your spending can help. But even a hand-written three-column list can be effective.

You don’t have to cut out everything in the “nice to have” column. You might really need a luxury or two to feel sane, and that’s OK. But you might want to cut back on a few if you anticipate struggling with your bills.

4. Prioritize your debts

Some debts are more urgent than others. Under normal circumstances, prioritizing high-interest debt over other accounts can save you the most, since interest adds up at a faster rate. But now, you also might want to factor in payment flexibility.

For example, credit cards have high interest rates compared to loans and mortgages. But they only come with monthly repayments. If you’ve already hit your forbearance limit on your car loan and mortgages, skipping a month or two of paying off your credit card balance will have a less damaging impact on your credit.

Talk to your creditors before making any decisions about debt. These are unprecedented times and they may have an emergency forbearance program to avoid a wave of defaults.

And if your credit hasn’t yet taken a hit, now is the time to consider consolidating debts or accessing credit to create a financial cushion while you still may qualify.

5. Negotiate with your landlord

Now is the time to let your landlord know if you think you might not be able to pay next month’s rent. They’ll likely be more understanding if you tell them ahead of time — and not so understanding if you’re just late.

6. Apply for other government assistance programs

Unemployed Americans have more access to government assistance programs than before. For example, Families First Coronavirus Response Act made it possible for you to get SNAP benefits —formerly known as food stamps — while also receiving unemployment. And Medicaid isn’t counting the $600 in federal unemployment benefits toward your income, making it easier for more people to qualify.

Many states also have additional assistance programs. For example, New York recently launched a program to help residents cover rent. Most local governments have a list of available resources online. Apply to as many as you can, as soon as you can — funding tends to run out quickly.

7. Look into private relief programs

Private organizations also are offering financial assistance to individuals impacted by the coronavirus. Often these are available by area or industry. For example, the Restaurant Employee Relief Fund offers grants of $500 to restaurant workers who got laid off.

Also look for mutual aid networks near you. These have sprung up across the country and often provide free meals and other kinds of assistance to people in their neighborhood. And often they can point you toward other resources.

8. Stay on top of the news

Chances are good that more relief is coming. Leaving millions of Americans high and dry would deal a devastating blow to the economy, and lawmakers know it. And don’t ignore your state and local governments. They might be able to pass assistance programs faster than Congress — but at a more limited capacity.

Apply as soon as you can when new programs become available. This can help ensure there are as few gaps in your income as possible.

Picture: Getty Images

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