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Politically, the future seems more unclear than ever.
If you’re trying to figure out what the elections mean for your money, you’re not alone.
However, we can make some good guesses about policy that may impact your wallet and some suggestions hold true no matter who is in office.
COVID-19, Stimulus Checks, and Unemployment
For many people, COVID and government stimulus checks are the most important thing on anyone’s mind.
While positive steps toward a vaccine have been made, we’re not there yet.
“There is agreement on the part of many camps that more stimulus is necessary,” says Mark Hamrick, the Washington bureau chief and senior economic analyst for Bankrate. “[But] the divide between the parties and chambers has come back into view.”
In order for people to get more stimulus checks and extra unemployment benefits, another stimulus bill would have to get passed by Congress then signed by the president.
This may be impacted by the runoff elections in Georgia. If something does pass, it might provide another one-time payment to eligible individuals.
Biden has signaled he has a stimulus plan, but it’s unclear if he’ll be able to pass it.
Federal student loan borrowers had their loans automatically placed into forbearance (temporarily pausing payments) and interest rates lowered to 0% starting in March 2020.
One of President Trump’s executive orders extended the relief through December 31, 2020, which was previously set to end at the end of September.
President-elect Biden will likely continue the policy by executive order if President Trump doesn’t offer another extension.
There is also a possibility that a Biden administration may be able to forgive federal student loan debt without input from Congress.
While you shouldn’t assume continued forbearance or forgiveness, letting your federal student loan payment remain paused while they’re not accruing interest may be a good idea.
Holt says, “We encourage borrowers to use the deferred student loan payments to cover essentials, build up savings, and eliminate more expensive forms of debt.”
Doing so could help you get into a better financial situation for when your payments resume.
The Federal Reserve rate is low and likely to remain so for a little while.
That means interest on loans you take out now will likely be lower, meaning you’ll pay less.
If you’re currently paying down debts, you may be able to refinance to a lower-rate loan.
On the other hand, low rates also impact how much interest banks can offer.
Don’t worry—Varo bank accounts still offer a much higher rate than the national average and don’t have any hidden fees.
What Now? Continue to Save When You Can
There are still so many unknowns, but here are some things you can do right now no matter what happens in D.C.
- Save if you can: “We encourage clients to curb spending on anything non-essential and avoid excess debt, especially as they approach the holiday season,” says Holt. “And if you haven’t started saving up for modest gifts or shopping for deals, now’s the time.”
- Talk to creditors: Reach out to private lenders. If you’ve had loans or lines of credit put into deferment or forbearance, talk to your lenders before your payments resume to see what they expect.
- Sign up for assistance programs: Assistance can come in the form of a food pantry, help with utility bills, and hardship programs from creditors.
- Work with a professional: Nonprofit credit counselors can provide budgeting and personal finance advice, and may be able to negotiate with your creditors. You can find a local agency here.
While there’s hope for a vaccine, this year has been hard and 2021 is still full of unknowns.
Whatever your political views or your position, remember that sometimes just getting by is good enough. So take care of yourselves and your community as much as your able and good luck.
Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s).