A Case to Save Your Coronavirus Check
If you are out of work or on a shorter schedule during the coronavirus pandemic, your government aid, which could arrive as early as this week, is likely to be a welcome top-up in your bank account.
But many of you with a stable income don’t seem to understand why you are getting a check at all or what to do with it.
Incentive payments are designed to support the economy during times when declining incomes and runaway unemployment mean that consumers are spending less. In theory, a good American consumer takes his money and buys groceries, pays the kindergarten bill, and possibly goes out to dinner and a movie. Money returns to the economy, which keeps the entire system running.
But this time it’s different. The shops are closed. Vacation planning has been suspended indefinitely. You can’t even jump into the car for a short trip to visit your family.
When I presented your best use cases for your coronavirus payment as 1) using it in accounts or 2) saving it, many of you reacted as if I had six eyes and had never looked at money with either of them. “It must be spent!” “Holding on to it doesn’t mean anything to the economy!” some of you have commented. Others saw it as your duty to donate money to low-wage workers, hairdressers and dog owners, whose services you cannot use right now.
And, believe me, I understand these incentives to spend money right away or give it to those who may need it more.
But if you haven’t bookmarked your check for basic household and family expenses yet, I want you to think more about saving money. It’s not that I’m against entertainment or good deeds. The reason I focus so much on saving now is because there is so much we still don’t know.
If you look at the initial jobless claims over the past 20 years, the recession looks like a speed bump compared to what happened last month.
We don’t know when this number will peak.
A survey of 20,000 Americans by research firm Piplsay found that 67% of people are worried about pay cuts or job losses due to the coronavirus pandemic. Nearly half of respondents said their employer did not make it clear that they would have two weeks of paid sick leave if forced to go into quarantine due to precautions or coronavirus symptoms.
And no matter how good you were at not touching your face, avoiding public places, and isolating yourself at home, the coronavirus curve hasn’t even begun to flatten out yet .
So if you don’t need your $ 1200 right now, it might be wise to keep it. Because we have no precedent for how this pandemic will affect our lifestyles in the short term, let alone in the medium or long term.
A poll released by Bankrate on March 31 found that 47% of people deliberately cut their spending due to concerns about the economy. This survey was conducted before unemployment soared. Previously, the United States held a leading position in the number of cases of coronavirus.
And even though financial institutions and service providers are offering payment assistance and waiving late fees right now, there is no guarantee how long this fix will last. Just like there is no guarantee that your check will arrive when you expect it, or that you will be able to go through your state’s unemployment system to start receiving benefits , or that your student loans will be eligible for a grace period after six months.
Yes, maybe someday you can order this new TV, or order dinner from your favorite restaurant, or give a 100% tip to your favorite workers. But at this point, there is too much uncertainty to worry about your benefits.
These are not normal economic times when the economy is in need of recovery. This money is truly a lifeline, and you may not yet know how much you need it.