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5 Key Financial Challenges to Navigate During COVID-19

Mari Adam

CFP®, MBA, CRPC®, Sr. Wealth Advisor


If you’ve been financially impacted by COVID-19, there is relief for you and your family. From unemployment benefit extensions to mortgage payment suspensions, here are 5 ways you can access help.

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5 Key Financial Challenges to Navigate During COVID-19

The COVID-19 pandemic may have peaked in some areas, but we’ve barely begun to deal with the disruption and economic dislocations left in its wake. We all expect to face financial challenges in the months ahead. Twenty-two million American workers filed for unemployment benefits in the last month alone.1 Most of us have someone we know—a family member, a neighbor, a friend—who has been touched by the crisis and is struggling to cope. Here’s how to navigate 5 major financial challenges, aided by the relief measures in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.


Challenge #1 – You lost your job

If you’ve lost your job, been furloughed, or your work hours or income are reduced due to COVID-19, be sure to file for unemployment relief as soon as possible. Under the CARES Act, the Federal Pandemic Unemployment Compensation (FPUC) program entitles eligible individuals to an extra 13 weeks of coverage, for a total of 39 weeks of benefits, with an additional $600 per week through the end of July. Be persistent, as some states are experiencing long delays in processing applications for benefits.

For the first time, independent contractors, self-employed people, and gig workers (like Uber drivers) are also eligible for unemployment benefits. As part of the CARES Act, the Pandemic Unemployment Assistance (PUA) program provides up to 39 weeks of unemployment compensation. States are currently working through this process, but for some you may experience a two-step filing process. Search for the PUA program on your state’s website to get more details on how to apply for benefits.


Challenge #2 – You lost your health insurance

If you’re furloughed, your employer may maintain your workplace health benefits and pay some, or all, of the monthly premium. But if you’ve been laid off, you’re likely to lose your health benefits unless you opt for coverage under COBRA, a health insurance continuation plan that extends coverage for up to 18 months. COBRA can be costly, as it requires you to pay the entire monthly premium, including the part your employer paid when you were working.

A less expensive option could be to sign up for new coverage under the Affordable Care Act through your state’s health marketplace, or Losing your job qualifies as an event under the “special enrollment period,” entitling you to sign up for new coverage. You may qualify for premium subsidies based on your income and household size. Individuals with low income may also be eligible for health benefits under Medicaid.

If you’re married, you can sign up for your spouse’s healthcare plan. Don’t forget that children under age 26 are also eligible for coverage under a parent’s plan.

The key takeaway? Don’t delay. You have a narrow timeframe to get new coverage in place. Even if you’re in great health, you need to maintain continuous health coverage, especially given the ongoing health crisis. Health insurance protects you from potentially catastrophic medical bills.


Challenge #3 – You’re struggling to pay the mortgage (or rent)

Homeowners with federally backed mortgages make up nearly half of the mortgages in this country. The CARES Act has two provisions that can benefit those impacted by COVID-19.

The first is a moratorium that stops your mortgage company from foreclosing for at least 60 days. The second is mortgage forbearance, allowing you to suspend mortgage payments without paying any additional interest or penalties for up to 180 days, with the right to request another 180-day extension. To qualify, you must experience financial hardship due to COVID-19.

Forbearance is not automatic. You must contact your loan servicer and apply. Delaying or stopping payments without a forbearance agreement in place could damage your credit. However, each loan servicer can decide how the suspended payments are to be repaid. Try to opt for a loan modification if it’s available, or you may face a hefty balloon payment at the end of the forbearance period.

If you can afford to make mortgage payments during forbearance, even partial ones, do so. Your loan servicer is ready and willing to work with you to address any hardship. If you do elect forbearance, it should not affect your credit, but as a precaution, stay on top of your credit report to ensure it’s accurate.

To see if your mortgage qualifies for CARES Act relief, ask your mortgage servicer or visit If you don’t have a federally backed mortgage, relief options may still be available through your mortgage servicer or the state.

Renters are also protected by the CARES Act. There’s a 120-day moratorium on evictions from federally subsidized housing and properties with federally backed mortgage loans. Plus, over 30 states have passed more expansive eviction moratoriums protecting renters.


Challenge #4 – You’re buried under student loan payments

There’s good news on student loan relief. To give your budget some breathing room, payments on most federal student loans are automatically suspended for over six months. The payment freeze affects most federal (but not private) student loans, comprising roughly 90% of outstanding student loans.1 There’s nothing you need to do to benefit from the federal loan relief. Your loan servicer will automatically suspend your payments from March 13 until September 30, 2020. The interest rate on loans will be set to 0% during that period, so no interest will accrue.

If you have private student loans, contact your loan servicer to ask for help.

If you can afford to continue making your payments, do so. Your entire payment will be used to reduce the loan principal, helping your loan get paid off faster.


Challenge #5 – You need to cut your budget

You may have found that your expenses while sheltering at home are different from what they were before the lockdown. For example, your expenses may have increased now that you’re buying more groceries, or you have college students who have returned home after campuses closed, increasing your utilities costs. Now is a good time to review your cash flow and budget to see how you can weather through the rough patches ahead.

If possible, cancel recurring charges, like gym memberships and streaming services, and dump pricey takeout and deliveries in favor of cooking at home. If you don’t know where your money goes, now’s your chance to find out. Use a free budget app like Mint or YNAB to monitor and control spending. And don’t hesitate to contact lenders and financial institutions to ask for hardship arrangements, like delayed payments, lower interest rates, and fee waivers on loans or credit cards.

Your financial advisor is ready to work with you on any changes to your financial plan. If you’re dealing with any of these financial challenges, we encourage you to reach out to your advisor.


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