CARES Act: The Covid Stimulus, Small Businesses, & You On ‘How To Money’

On this episode of How To Money, Joel and Matt discuss the coronavirus stimulus package, or CARES Act, that recently passed Congress. With nearly 17 million people out of work, this is top-of-mind for almost everyone in this country, from gig workers to small business owners. They go into the details, what it means for you, and answer listener questions about contributing to retirement funds, investing in a down market, whether or not to pay on your student loans, and what's in it for small business owners. Check out their website for useful links and resources, too – they even have a list of certified financial planners who are offering free advice.

The guys focus primarily on the expanded unemployment benefits in the stimulus, which will flow through each state’s Department of Labor, giving applicants an additional $600 a week on top of whatever your state normally pays in unemployment. These benefits have also expanded to include furloughed workers, gig and contract workers, and even people who are receiving reduced paychecks or had their hours cut but are still technically employed. While a lot of details are still being ironed out, and Department of Labor servers are overloading, they say to “be patient and persistent” in applying; eventually all the guidelines will be available, and you want your application at the top of the pile if possible. 

For small business owners, there’s a lot of incentive to keep employees on their payroll: One is called EIDL, or Economic Industry Disaster Loans. Normally these are reserved for businesses affected by a natural disaster like a tornado or a flood, but the whole country is a disaster area in a pandemic, so these loans are expanded to businesses in all 50 states to use on covering payroll, rent or mortgage payments, or to cover increased costs due to supply chain issues. There’s also the Payment Protection Program, or PPP, that small businesses can apply for to keep giving their employees a paycheck. These loans are forgivable up to $10,000, as well. If you’re an employee who’s been laid off because of coronavirus, it’s worth reaching out to your employer to see if they’re applying for these benefits. 

They also answer listener questions about student loans – since payments have been suspended for six months, with no interest accruing, should they continue to pay the loan if they’re able? Matt and Joel say there’s “no reason to not take advantage” of the loan suspension: Firstly, because we all need cash on hand to weather this crisis, and secondly, because the suspended payments won’t hurt your credit, and even count towards your forgiveness timetable. Listen to this episode to get all this information, as well as why Health Savings Accounts are the best retirement investment vehicles, what to do with your employer-matched 401K, and much more on How To Money. 

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