Tips to pay the bills during coronavirus financial crisis

BOSTON — With unemployment high and business slow during the coronavirus pandemic, many are struggling to save money or simply pay the bills.

Deborah Cartisser, Chief Operating Officer at Twelve Points Wealth Management, tells Boston 25 News, for those having trouble paying their bills, financial advisors like herself recommend a hierarchy of where to spend.

First, of course, is keeping food on the table. Then, paying utilities to keep the heat and lights on, as well as cable and internet to stay connected and be able to search for jobs, if needed.

For rent or mortgage payments, residents should call their landlords or lenders and ask about their hardship options. Many banks are allowing borrowers to defer mortgage payments for several months, with no penalty, but the interest will continue to accrue.

"Different companies have different arrangements. So there's no hard-and-fast rule on what to expect," Cartisser said. "I called a couple companies out of curiosity to see what's going on. And what I've seen is three months deferral, and then that three months gets put on the end of the payment. So that could be really beneficial to people who are struggling."

But, Cartisser warns, borrowers must call their banks before stopping payments. She urges anyone making such calls to make a record of the representative they are talking to, as well as the day and the time, so, if there is a discrepancy, the taped phone call can be pulled.

Credit card companies are also offering relief to card holders with mounting debt, including payment deferral and waived fees. Cartisser suggests card holders also research different credit card rates and consider transferring from one card company to another to get, for example, a year's worth of interest forgiveness.

For those considering reaching into their 401Ks, the 10-percent early withdrawal penalty will be waived up to $100,000, if the person is experiencing a coronavirus-related financial hardship. Cartisser warns only to touch one's retirement fund as a last resort.

"If you can take out a line of credit on your house, it's better to do that than to take out your retirement funds," Cartisser said. "Because, when you think about it, you contribute to your retirement money with pretax earnings. So a dollar earned is a dollar into your retirement account. And when you go to pay that back, it's post-tax money."

While most are staying in, not spending money on restaurants, entertainment and gas, there is an opportunity to limit spending. Using free WiFi hot spots and taking advantage of free movies networks are offering during the pandemic are other ways to save, Cartisser said.

Cartisser recommends taking advantage of historically low mortgage rates and refinancing, if the borrowers are still employed, encouraging borrowers to make calls and get the paperwork ready.

“I think people have less time on their hands, because they’re juggling so much. But it is really worthwhile to set that time aside and make those phone calls and do your research,” Cartisser said. “Search the internet and see what’s available, because there is a lot out there, and there are ways to be smart about this and be thrifty and help yourselves.”

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