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5/11/2020

The COVID-19 Pandemic Financial Experience Scale | Treading Mode

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Head above water
Where are you on the COVID-19 Pandemic Financial Experience Scale? Working-class people are experiencing this pandemic very differently financially. There are 3 benchmarks on the scale. This is a look at the second benchmark, "Treading."
TREADING MODE
For you, the crisis is disruptive but not destructive. You have some reserves and a safety net. You are experiencing diminished income. You can maintain most of your lifestyle with a combination of reduction of non-essential expenses and subsidies from your stockpiles of food and finances. There are finite amounts of those resources available. Here are some tactics you can use to help you maintain the status quo for a while.
  • Pay your bills on time, especially credit cards, a crucial part of your safety net. Don't leave yourself cash-poor. Cash on hand is a priority in a crisis.
  • Consider forbearances and other payment assistance options. Successful treading requires sustained minimum energy expenditure over time. It not about speed rather endurance. Reducing your outgoing monthly expenses allows you to conserve your cash resources. Be proactive with your creditors. Seek assistance before you fall behind.
A mortgage and other installment payment forbearance allows you to stop or reduce payments for a while. This will enable you to keep those payments in the bank. Those funds become discretionary during the forbearance. They can be used to plug short term spending leaks or added to your emergency fund. That deferred monthly payment becomes a cash cushion for you during this time. Understand a 'deferred payment' doesn't mean a 'never payment.' You will eventually have to make up any deferred payments. 

Credit card forbearances can be tricky. It's all about the interest and how it reports to the credit bureaus. I've heard of some very generous terms. ‘Current balance held at no interest until paid in full as serviced by a minimum payment.’ It is also reported to the credit bureaus as "paid as agreed." If you currently have a statement balance that amounts to an interest-free loan instead of the legally usurious interest rates credit cards charge now. Double-check to see if the terms apply to cash advance balances also. Often you "voluntarily" agree not to use the credit card during the forbearance period. If your credit servicer is not offering generous terms, make your minimum monthly payment during the pandemic. (If you are unable to make your minimum monthly payments, you are in Surviving mode.)

​Keeping your word is paramount in this situation. Do not make commitments you can't keep. You may have to go back to your creditors for additional relief. Broken payment promises may make them less likely to provide help.
  • Invoke austerity measures. Change your lifestyle. Fund needs and not wants. You don't know how long this is going to last for you. Your place in the economy will determine how fast you rebound after the pandemic. No matter your situation, prepare for a long slow recovery and be wrong. Aggressively shed or reduce expenses, especially daily and seasonal energy costs. This may require you to invest in upgraded technologies like LED lighting, Energy-Star appliances, more insulation, or Smart thermostat. When you reduce your energy usage, you reduce your living expenses.
  • Keep your head up. The water-treading survival technique may be executed differently. Still, in this atmosphere of depression, anxiety, and stress, head-up is the way to make it. Self-care is a necessary part of your success. You should not perilously neglect and ignore the impact of the pandemic on your 'being.' And its effect on those you care about the most. Be grateful your head is above water and plan for the future. Sustainable financial well-being should be part of that future. Then do the slow grinding work that treading requires to get you there. Treading builds the knowledge, wisdom, and "#MoneyMuscleMemory" ™ to get there and then stay there. ​

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5/5/2020

The COVID-19 Pandemic Financial Experience Scale| Surviving Mode

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Stressed woman
Where are you on the COVID-19 Pandemic Financial Experience Scale? Working-class people are experiencing this pandemic very differently financially. There are 3 benchmarks on the scale. This is a look at the first benchmark, "Surviving."
​
SURVIVING MODE
This crisis caught you unprepared. You have limited resources anda fragile safety net. Your income is gone. Your lifestyle is in jeopardy. Your standard of living is diminished. You have done all you know to do. The stress and pressure are negatively affecting you, physically and emotionally. You’ve gone from making savings and debt reduction decisions to housing and food insecurity. Your financial focus (time, talent, and treasure) has shifted from working on longer-term goals to money shortage problem-solving. You see very little if any light at the end of the tunnel. Your future looks bleak. You need a miracle. So, position yourself for one. Here is how to activate the power of God in your financial life, on purpose.

Become a hardcore, no turning back, tither of your gross income. Tithing is a covenant between you and God. It is a contract that He offered. It is a lot like those “terms of use” agreements we get when we download a new app. It is pretty much, “take it or leave it.” If you don’t agree, you won’t get the benefits of the app. To get the benefits of tithing, you must sign the agreement. You do that by making a commitment to tithe. Then demonstrate that commitment by your future behavior. If you do that, God promises to meet all your needs. 

The context of this promise is to individuals who had not tithed in the past, like you. Despite that, they were offered a fresh start. That is true for you also. Grace and Mercy will overcome your guilt and history financially. The point is to start and don’t stop.

It is controversial whether the tithe applies to the New Testament dispensation. It is not controversial to me. When I made my commitment to tithe, “I was so broke I couldn’t pay attention.” My conversation with God went like this. “Okay, Lord, You said if I tithed, You would bless me and mine. If You bless me, I’ll go tell it. And if You don’t bless me, I’ll go tell that too.” That was not a threat to God but rather a promise to give Him a Yelp review. That was about 4 decades ago, and I have never looked back or regretted the decision. “Five stars, Outstanding customer service.”

“Blessed” means different things to different people. Here are some of the elements I consider when I say, “I’m blessed.”
  • Things seem to last longer, cars, appliances, clothes have extended life. The less often you have to replace these necessities, the more of your money you get to keep. The longer you can keep your money, the better. Of course, occasionally you have to do some maintenance on older cars and appliances. Repairs cost often had less long-term budget impact than paying for something newer. Especially when I was prepared for them with an emergency fund. (This observation doesn’t apply to your children’s clothes. They just outgrow them. But it may work for some hand-me-downs.) 
  • My money wisdom increased. I got smarter about using my money and other resources. It required an effort to start tithing. Taking 10% of your gross income from your net, take-home-pay, when you are already behind on everything, is a daunting challenge. Learning to do so brought wisdom through trial and error and self-education. “Experience is a hard teacher because she gives the test first, the lesson afterward.” -Vernon Law
  • Opportunities for income were available. These opportunities were often relative to my place in the economy and my ability to see the opportunity. 
  • The tithe helped anchor my faith. That consistent behavior created tangible consistency for me, a quid pro quo.
  • I have always had my daily bread, and my needs met. My wants are satisfied, not all the time, but most times.
Organize your financial records and accounts. Miracles of provision require orderliness and a gift. These two factors, order and a gift, are present before God’s miraculous provision in Biblical accounts. Before a miracle of provision manifests, there must be order. Jesus had the multitudes seated before the fishes and loaves where distributed. The widow provided for Elijah in a famine, and God supplied her daily. The nation of Israel collected the manna in a prescribed manner. Your tithe is the gift. Now get your finances organized.

Get your eyes off the promise and turn them toward the Promise Keeper. Now that you have started tithing, you rightfully expect a return. However, tithing is not an investment. Your focus should not be on the timing and size of the promised return. Instead, your focus should be on pleasing God. Remember, He provides daily.

Be wary  of those who preach to your desperation and not to your faith. Tithing requires you to give your money away. Where you give your money is important. Because of the prevalence of “prosperity preachers and  famine feeders” making appeals, the tithing message can be easily distorted to appeal to your need. Give to them, and you will receive, you are told. That appeals to your need. You don’t give to get, no matter how great your need. You give to honor God. Your motive is just as important as your behavior. When you give, be sure it is for the right reason and not because of a compelling appeal.

Miraculously changing your financial life requires a change in behavior. Behavior changes are not easy. Changes of behavior require commitment. Commitment is demonstrated by behavior. Tithing is a behavior. And just like with exercise and oral hygiene, consistency is what brings long-term results. 

​The COVID-19 pandemic has forced you into a desperate situation. Your options are few and dwindling. Your situation seems beyond your capacity to solve. You need a miracle. Position yourself for a lifetime of miraculous provisions by being a hardcore tither. What have you got to lose? You don’t have enough to make it now, anyhow, right? Honor God with your tithe and experience His provision and more. True, you don't have to be a tither to be blessed by God. However, I have never seen a tither not blessed by God. No, not one.

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    Mansa Musa is a homeownership counselor and homebuyer educator. He is currently the Principal at MoneySmartLife.org. He blogs and speaks on subjects of financial well-being and financial capability. Helping working class families live a sustainable MoneySmartLife through pragmatic solutions and behavior changes.

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  • MoneySmartLife.org and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. 
  • The views, thoughts, and opinions expressed belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual; either in the past or future. 
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  • Home
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