TBT: How to Get Your Own Personal Bailout

Since the Great Recession, I've learned how to take charge of my personal finances. My money life was kind of a dumpster fire after quitting grad school, and now my household is in great financial shape--even though our income remains very modest. I've learned to do a lot with a little, and I've learned to be proactive and find myself the best interest rates and discounts for long-term savings.

Now, in the time of corona, there are suddenly a variety of resources rolling out to help regular people and small business owners to weather the pandemic. If you haven't received your stimulus check yet because you don't file taxes, you can probably speed up the process by entering your bank account information on the IRS website here. Each American citizen (who is not someone else's dependent for tax purposes) is eligible for $1200 plus $500 for each dependent minor child, unless you are rich, in which case you might get less or nothing, but that's okay, you're rich!

The stimulus plan was rolled out in a hurry and does leave some people out (like many college students) who could use that money, so try to keep up with the news on new programs that might include more Americans who fell through the cracks on this one.

The New York Times has put together a list of coronavirus financial resources that offer help with unemployment, paid leave, student loan deferment, mortgage and rent deferment, utility shutoff protection, and more. While some financial relief is happening automatically, other programs require you to ask or apply for them. If there isn't a federal, state, or local government program that offers what you need, try searching what nonprofits offer. Many food banks are working harder than ever before to keep people from going hungry.

At all times, during a crisis or not, there are ways to negotiate or ask for discounts, better interest rates, and easier payment plans. It's like asking for a raise; you're more likely to receive the more you ask. My husband and I have learned this over the years by negotiating with student loan, mortgage, and credit card lenders, car dealers, landlords, and utility companies.

After you receive some of that sweet relief, make it last. If you can, try to sock away 3 - 6 months of expenses in an emergency fund. I've never been able to do that before, but with the recent stimulus payments and extra unemployment for my husband and long holiday on student loan payments, we're almost there. And I'm not tempted to spend it on anything that's not an actual emergency, because my income as a nonprofit worker is precarious, and so far there's no unemployment benefit available to me if my organization goes under.

Remember, financial hardships don't have to be permanent. My husband and I have certainly come a long way from our 20s to our 30s. The post below is a snapshot from the Great Recession, when we were just figuring all this out.

Get Your Own Personal Bailout

Wealthy CEOs and mega-corporations aren't the only ones who can negotiate out of serious debt. So can we poor folks... to some extent. If you have medical debt, credit card debt, or debt that is in collections, you can contact the collector (the hospital, credit card company, or collections agency) to negotiate a settlement. It helps if you can scrape together a lump sum of a few grand, or about 60% of the total you owe.

Glamour Magazine's Little Miss Fortune just posted some information on how to do this.

You can also ask credit card companies to lower your interest rate. Sometimes it works, and sometimes it doesn't. But it doesn't hurt anything to try. I've done it a couple of times and had my rates cut in half.

[Like, don't you WANT me to keep shopping?]

So offer a lump sum for a lower overall balance. Ask your credit card companies for a lower rate. Sure, you might have brought debt upon yourself. But don't tell yourself, "I deserve this" and allow rich corporations to take maximum advantage of your financial missteps. Negotiate, settle, and move forward making better spending choices in the future. It will benefit you, your family, AND the economy if you can get your finances in order.

[You tell 'em, honey!]

I'm calling AmEx today! My 0% introductory rate for 18 months ran out, and I've been hit with a rate near 12%. Did I bring this debt upon myself? Absolutely. Did I know the zero-interest deal was temporary? You bet. I'll be paying off my balance, plus interest. But I think a 12% rate is absurd and, I hope, negotiable. Wish me luck.

Comments

  1. Success! I called American Express and asked for a lower rate. No screaming, begging, or any kind of rudeness involved. The customer service agent simply looked up all the available products on his computer and switched my account to a card with a lower rate and a different reward system (which I don't care about anyway). I reduced a 12% rate to 8% interest with a five-minute call. Not bad!

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