The financial impact of COVID-19 is going to be devastating.

[Mai72]

I live at the shore in NJ. Many of us rely on the tourist who bring their money to the Jersey shore. I know people who work in the summer and collect unemployment in the winter. We have a boardwalk and beach that attracts hundreds of thousands of people every summer. That's a lot of taxable income, and many jobs for people who need the money. My parents owned a small restaurant so I know firsthand the financial struggle. A bad summer was devasting. Many small businesses are woring on razor thin margins as it is. Most don't have the capital to withstand a missed summer. A summer without tourist will be a very bad situation for many here. It's very difficult to find work in the off-season. I'm also expecting to see mass bankrupticuies in my area. This is going to be unavoidable. This will affect education, and other public service positions as well. When no money is coming in, you can expect to see more layoffs at the local level. It's unavoidable. This isn't going to end in May, so it's very doubtful that we will have Memorial weekend. It's just not going to happen. We can't have tens of thousands of people at the shore when COVID-19 is still an issue.

Many American aren't able to pay a $400 emergency. How many have a 6-month fund to carry them through? We need to be honest and realize that we are in for a very difficult time financially when this is over. Many small and a few large businesses are never going to come back. 57 million workers are part of the gig economy. That's a lot of people who aren't going to be working. There is going to be a TON of pain for many when this is over. Especially millennials because they hold so little wealth, and typically carry a TON of debt int he form of credit cards, auto and student loans.

Many Americans who can't afford a $400 emergency blame debt

Some 40% of Americans would struggle to come up with even $400 to pay for an emergency expense. Just how are so many Americans so short on cash? Blame debt.

www.cnbc.com

57 Million U.S. Workers Are Part Of The Gig Economy

Are you part of the Gig Economy? Do you have a "Side Hustle?" If yes, then you are part of the 36 percent of U.S. workers are in the gig economy, which works out to a very large number of approximately 57 million people.

www.forbes.com

 

[Dr. Detroit]

March wasn't even a full month of shutdown - April non-payment will be even higher

Nearly A Third Of Renters Didn't Pay By 1st Week Of April

With so many people out of work, there was a steep jump in renters not paying on time, a trade group says. It says next month could be much worse if government help doesn't reach people in time.

www.npr.org

 

[brianmanahan]

 

[brianmanahan]

on a related note, the accompanying text for the above image:

At the end of January I took a new job as Director of Clinical Research for a start up in San Francisco. Long story short, the owner of the company stopped paying me shortly after coming on board. I got a small check in February to cover the week I worked in January and that was it.

I didn't have much in savings since I used everything up moving out to California in July, but what I had left went to rent for February and March, as well as bills and food and such. Two months in California cleaned me out.

I have been looking for another job for the past month but it has been slow to go. There is a lot of research out here but there are also a lot of qualified applicants. I have my second wave of interviews for two promising positions next week and I am hopeful one of them will pan out.

In the meantime, I just got the notice of eviction today.

I have a 17 year old daughter and 3 dogs, no money, and no place to go. I don't really have friends here, no support system, and no clue what I am going to do.

I have filed a complaint with the labor board and am waiting for a hearing regarding my back pay, but it's not likely to be resolved before I am supposed to be out of my house.

I just keep thinking, this can't be my life. How can everything turn to shit in two months? I have always lived just above paycheck to paycheck, but I have always been able to make things work. This time I don't see a way forward. There is a strong possibility that we will be homeless in two weeks.

Tl/dr: boss stopped paying me, getting evicted, about to be homeless.

 

[Red Squirrel]

I'm definitely counting my blessings with all this. I have a job in an essential industry, so my pay cheque has not changed and I'm not financially impacted. In fact, because I am mostly working from home now I'm saving money in gas... not that I was spending that much being 5 minutes from work, but it's something. Also not going anywhere in general so the truck has not moved in over a week.

All this does show how broken our whole system is though. So many people living paycheque to paycheque (including myself). Costs of living are just too high and keep going up every year, and pay cheques are JUST enough to pay for those costs, not many people have breathing room to save.

Some of those costs are STILL going up in middle of all this. Heard lot of insurance companies have been increasing their rates on people, just as a routine increase. City taxes went up too, water/sewer etc... at very least you would think they would not increase costs, but they really don't care.

 

[Mai72]

I'm definitely counting my blessings with all this. I have a job in an essential industry, so my pay cheque has not changed and I'm not financially impacted. In fact, because I am mostly working from home now I'm saving money in gas... not that I was spending that much being 5 minutes from work, but it's something. Also not going anywhere in general so the truck has not moved in over a week.

All this does show how broken our whole system is though. So many people living paycheque to paycheque (including myself). Costs of living are just too high and keep going up every year, and pay cheques are JUST enough to pay for those costs, not many people have breathing room to save.

Some of those costs are STILL going up in middle of all this. Heard lot of insurance companies have been increasing their rates on people, just as a routine increase. City taxes went up too, water/sewer etc... at very least you would think they would not increase costs, but they really don't care.

Yea, I know the pain. I told myself that I'm going to be very careful about my spending. Like most people I spend without much thought. $5 here. $3 there. Another $5 Those small purchases add up and can run into the thousands at the end of the year. I don't have many bills, and I've kept it like that because I've seen the trouble people get in when they don't budget. The cost of living will continue to increase, and I agree that the system is in trouble. Has been for some time. This pandemic is just acclerating issues like the haves vs. the have nots, etc. Good luck.

 

[Fritzo]

Tips to get through this-

If you have a mortgage: nearly all banks are offering a 90 day no questions asked furlough on your payment. It won't affect your credit history and they simply move 3 months to the rear of your loan. No proof is needed- just call, say you're affected by the COVID issue, and poof. You're done. They may send some paperwork asking for income levels, but that's just a formality.

Same with all loans: car/personal/credit card/etc. Call and they'll suspend your payment.

Extended unemployment is available and they've made it easy to sign up online. The procedure varies from state to state.

Relief checks are on the way...some estimates by the 3rd week of April. If you get this money, hold on to it and use it as a last resort. It's emergency money, not "buy a new TV" money.

If you rent, this is more difficult, but they've made it illegal to evict anyone at this time. Try to work with your landlord about reduced/waived rent.

Hope some of these tips help. We're taking care of our daughter who just started a skincare business. She was open 3 weeks and had to shut down. We're paying her car payment, office rent, and insurance until she gets back to work. The stopped mortgage payment really helps there.

 

[Fritzo]

I'm definitely counting my blessings with all this. I have a job in an essential industry, so my pay cheque has not changed and I'm not financially impacted. In fact, because I am mostly working from home now I'm saving money in gas... not that I was spending that much being 5 minutes from work, but it's something. Also not going anywhere in general so the truck has not moved in over a week.

All this does show how broken our whole system is though. So many people living paycheque to paycheque (including myself). Costs of living are just too high and keep going up every year, and pay cheques are JUST enough to pay for those costs, not many people have breathing room to save.

Some of those costs are STILL going up in middle of all this. Heard lot of insurance companies have been increasing their rates on people, just as a routine increase. City taxes went up too, water/sewer etc... at very least you would think they would not increase costs, but they really don't care.

I'm in the same boat. I work with a top-notch IT company, and we're busy as all get out setting up VPNs, remote phone systems, and so forth. I LOVE working from home...no driving, eat/drink whenever I want, only have to get dressed from the middle up for video calls....it's heaven! If anything, we're probably going to get more business when this is all said and done as people shore up their business for these kinds of emergencies.

My wife works for the education system and is off the rest of the school year with pay, so she's all set too. My heart goes out to those in manufacturing/service/retail that are being laid off or not getting any customers. I've been donating heavily to food banks in the area and we have neighborhood Facebook pages that are watching out for each other.

This is all temporary...just remember that. We'll be stronger and smarter when we come out of it, and we all have each other's backs.

 

[Dr. Detroit]

All this does show how broken our whole system is though. So many people living paycheque to paycheque (including myself). Costs of living are just too high and keep going up every year, and pay cheques are JUST enough to pay for those costs, not many people have breathing room to save.

If only people learned to live within their means not paycheck to paycheck:

New-Car Finance Data
	March 2020	March 2019	March 2015
Term	70.6	69.6	67.6
Monthly Payment	$573	$553	$489
Amount Financed	$34,052	$31,962	$28,592
APR	5.8%	6.4%	4.8%
Down Payment	$4,008	$4,217	$3,508

Auto Loan Interest Rates See a Slight Lift in March, According to Edmunds

/PRNewswire/ -- The average interest rate for a new vehicle loan rose slightly in March, according to the car shopping experts at Edmunds. The annual...

www.prnewswire.com

 

[BarkingGhostar]

Well, I work for the devil and this is devilishly good tidings so there is that.

 

[brianmanahan]

If only people learned to live within their means not paycheck to paycheck:

like financialsamurai said, people shouldn't spend more than %10 of one year's annual income on a car

i.e. 30$k income means your car is cheaper than 3$k total

 

[Hayabusa Rider]

like financialsamurai said, people shouldn't spend more than %10 of one year's annual income on a car

i.e. 30$k income means your car is cheaper than 3$k total

Then you have a heart attack or stroke or debilitating cancer and all that planning goes to hell. Sure plan wisely but sometimes life does not give a you-know-what. The saying is "Man plans, God laughs".

 

[Herr Kutz]

I'm definitely counting my blessings with all this. I have a job in an essential industry, so my pay cheque has not changed and I'm not financially impacted. In fact, because I am mostly working from home now I'm saving money in gas... not that I was spending that much being 5 minutes from work, but it's something. Also not going anywhere in general so the truck has not moved in over a week.

All this does show how broken our whole system is though. So many people living paycheque to paycheque (including myself). Costs of living are just too high and keep going up every year, and pay cheques are JUST enough to pay for those costs, not many people have breathing room to save.

Some of those costs are STILL going up in middle of all this. Heard lot of insurance companies have been increasing their rates on people, just as a routine increase. City taxes went up too, water/sewer etc... at very least you would think they would not increase costs, but they really don't care.

Just got an email this morning that Geico is giving a 15% credit

 

[Red Squirrel]

If only people learned to live within their means not paycheck to paycheck:

New-Car Finance Data
	March 2020	March 2019	March 2015
Term	70.6	69.6	67.6
Monthly Payment	$573	$553	$489
Amount Financed	$34,052	$31,962	$28,592
APR	5.8%	6.4%	4.8%
Down Payment	$4,008	$4,217	$3,508

Auto Loan Interest Rates See a Slight Lift in March, According to Edmunds

/PRNewswire/ -- The average interest rate for a new vehicle loan rose slightly in March, according to the car shopping experts at Edmunds. The annual...

www.prnewswire.com

Buying a car new is not living within your means. New cars are way too expensive when you can get used for like 1/10th of the price. I could never justify buying new. MAYBE an EV because there are not really any on the used market, but even then I can't justify. A Tesla is like 70 grand and it's probably more after all other applicable fees like sales tax are added, that's just the sticker price. I can literally buy 150 acres of land for that much - and that last's more than 15-20 years.

The real issue is all the bills, the ones you can't control. Hydro, gas, insurance, internet, phone, property taxes, water/sewer bill etc... you can't really control those, you can't make those smaller. Even hydro and gas, even if you use no energy your bill is still at least $100 because of all the fixed costs.

 

[Fritzo]

like financialsamurai said, people shouldn't spend more than %10 of one year's annual income on a car

i.e. 30$k income means your car is cheaper than 3$k total

I've always disagreed with that. If you make $60000 a year, you can afford a $6000 car? That's stupid---a $6000 car will be 20 years old and require constant maintenance if you're going to drive it every day. My rule for the best value for the buck is get a car 3-5 years old. They've received their maximum depreciation of around 50% by that point, they'll still be new and modern, and you won't be leaking fluids all over your boss's parking lot every day.

New cars are priced out of the market, and car manufacturers KNOW they're no longer affordable. That's why we have common 72-96 month loan terms. There is no reason to buy a NEW car, but there's no reason to resort to a money pit rust bucket either.

(BTW- as a car guy, avoid ALL cars made in the 2007-2011 era. These are "recession cars" and manufacturers were struggling to keep from going broke. This era had some of the shoddiest cost-cutting designs I've ever seen. Chrysler is probably the #1 offender here, but all manufacturers cheaped out during this time.)

 

[Red Squirrel]

Still cheaper to deal with maintenance on an old car than making payments on a new car though. Either way you will need to do repairs on the new one eventually.

Even my used 2009 truck I kinda have buyer's remorse, paid around 14k and racked up the credit line. Really should have gotten another small car and could have gotten a 4x8 trailer and a hitch so I can still do dump and HD runs. Though the ground clearance of a truck is nice. I can just drive straight out of the driveway in the morning and worry about snowblowing it after work.

 

[Mai72]

I've always disagreed with that. If you make $60000 a year, you can afford a $6000 car? That's stupid---a $6000 car will be 20 years old and require constant maintenance if you're going to drive it every day. My rule for the best value for the buck is get a car 3-5 years old. They've received their maximum depreciation of around 50% by that point, they'll still be new and modern, and you won't be leaking fluids all over your boss's parking lot every day.

New cars are priced out of the market, and car manufacturers KNOW they're no longer affordable. That's why we have common 72-96 month loan terms. There is no reason to buy a NEW car, but there's no reason to resort to a money pit rust bucket either.

(BTW- as a car guy, avoid ALL cars made in the 2007-2011 era. These are "recession cars" and manufacturers were struggling to keep from going broke. This era had some of the shoddiest cost-cutting designs I've ever seen. Chrysler is probably the #1 offender here, but all manufacturers cheaped out during this time.)

I bought a 2005 Hyundai Elentra for $2k last year. It had at the time $72k miles. It was driven by an old lady who died a year before. It has a new alternator as well. It's clean and I've the only thing I did to this car is I had put a new power steering belt a month after purchase. IMO, people shouldn't be purchasing a $40k new car when they only make $40k a year. You have to take the percentage of what you make and figure that into your auto budget. So, if you make $40k your car budget should only be $4k. That's 10% of your budget. If you wanted to go 20% you can spend $8k. I wouldn't go much higher than that because most of your pay will be going to car payments, plus insurance. I've seen too many people take on $500 car payments when they are only making $35k a year. That will leave you always strapped for cash. We will justify buying s new car because we need a reliable source of transportation. I get it, but you can do the same with a $4k car. Especially if you are only traveling locally.

It's very difficult to save money when you have 25% of your income tied into a car. It will leave you broke if you're not careful.

 

[nakedfrog]

I've always disagreed with that. If you make $60000 a year, you can afford a $6000 car? That's stupid---a $6000 car will be 20 years old and require constant maintenance if you're going to drive it every day.

We already had this discussion a while back, and you're still wrong
A very brief search here turned up 5 cars from 2012 in the $5000-6000 range.

 

[brainhulk]

no m3, no women

got to pay to be a playa

 

[dasherHampton]

I think this board did have this discussion recently.

My rule is never finance more than $10,000. If you can afford to put down $2000 you can get a $12,000 car, if you can afford to put down $10,000 you can get a $20,000 car etc. I really believe you'll come out ahead in the one term. I helped a girl get a 2015 Jetta that was priced at $14000 a few years ago (lent her the downpayment money). The payment on the $10,000 was like $150 a month.

If you really want that 2007 Vantage for $45,000 that you've been lusting for you're going to have to pony up $35,000 in cash.

 

[snoopy7548]

IMO you should only buy as much car as you can comfortably afford, but the problem is most people think they can comfortably afford something that is way out of their price range.

I would never finance a car unless I could get a rate that was less than what my savings account pays out. I keep my cars for as long as possible, and I save my money, so I'm able to just buy a new one in cash when I'm ready.

 

[WhoBeDaPlaya]

What financial impact?
Stocks only go up (bad news -> +5%, no news -> +10%, good news -> +15%)
/sarcasm

 

[ponyo]

Boomers are going to die of COVID-19. Their kids are going to inherit their parents house, stocks, land, cash, etc. The kids are going to be sad for a bit but then spend their new inherited wealth on new Tesla Model 3, Model Y, and other wants. They will spend and blow the inheritance money. It's inevitable.

 

[Sgt. York]

The vast majority of boomers won't be affected by the virus, so don't hold your breath waiting for their kids to start spending their inheritances.

 

[IronWing]

Boomers are going to die of COVID-19. Their kids are going to inherit [insert] what little of[/insert] their parents house, stocks, land, cash, etc [insert] remains after the medical industry bleeds them dry[/insert]. The kids are going to be sad for a bit but then spend their new inherited wealth on new Tesla Model 3, Model Y big f'in' trucks, and other wants. They will spend and blow the inheritance money. It's inevitable.

fixed for 'Merica