May 7, 2020

How Our Personal Finance Writers Are Adjusting Their Spending

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The coronavirus pandemic has pummeled the United States economy, leaving more than 30 million Americans unemployed. April’s job numbers are predicted to be some of the worst on record, with the unemployment rate expected to reach 15 percent or higher — the worst since the Great Depression. Across the country, Americans are rethinking their day-to-day spending and long-term financial planning.

Ron Lieber, the Your Money columnist for The Times, and Tara Siegel-Bernard, a personal finance reporter, recently hosted a group call with readers as part of the new “Live at Home” event series. They discussed some of the advice they’ve recently shared with readers and the financial adjustments they’re making in their own lives.

RON LIEBER: What’s the advice that you’ve actually given out in the last six weeks that you think is most useful?

TARA SIEGEL-BERNARD: Well, with the sheer volume of self-employed people that we both heard from, I really wanted to try to find everything that’s available for them now. Whether you’re a freelancer, an independent contractor, or a hairstylist, there’s really no safety net for this group. These are the people that are really on their own. So I tried to go through all the legislation and pick all the pieces that would help these folks and just put it in one place.

One way they are being helped: There has been a big expansion of unemployment through this program called the Pandemic Unemployment Assistance program. It’s now up and running in about 30 states. But I know there have been a lot of frustrated people out there waiting to see what they will get and whether they will qualify.

SIEGEL-BERNARD: What type of advice have you given out that you think is most useful?

LIEBER: I’m trying to give good advice to people who are suddenly without income. For the people who still have income but are themselves worried for their own reasons, the advice that we’ve stood by is: “Don’t just do something. Stand there.” They feel like the world is swirling around them and they really need to do something. And more often than not, the right thing to do is just stop and wait, take a deep breath and see what happens. I’ve been trying to do that personally myself with a few limited exceptions.

LIEBER: Is there anything you’ve done in the last six weeks to put yourself and your family in a better situation financially?

SIEGEL-BERNARD: I called my car insurer to see if they’d give me a discount and now I’m going to get a discount automatically in October.

I was also curious to see the impact of not buying lunch at work and not paying for subway passes — and whether the credit card bill this month would be that much less. But it wasn’t. I think we’re spending much more on food now. But it has made me take a more critical look at my spending. We don’t know how long it’s going to drag on. We don’t know what’s going to happen. So, I’ve just been trying to be more careful and deliberate with my spending.

SIEGEL-BERNARD: What about you?

LIEBER: So we did a refinance on our mortgage and we took our payment down by nearly 30 percent per month while having to extend the term only another nine years. I wasn’t happy about effectively setting myself up to pay on this thing well into my 70s. But that extra money per month could make a difference in any number of ways, no matter what happens in the world in the coming months or years. So, given that they’re just giving money away essentially in the mortgage market right now, it seemed like it was worth doing. It was a tough process. They wanted our pay stubs like, practically, every two weeks to make sure that none of the people in the household had been fired.

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