Many Millennials are facing student loan debt. As you may already know by now; the government has enacted a mandatory deferment on all Federal student loans from March 13th, 2020  – September 30th, 2020.
That means people holding Federal student loans do not have to make a principal or interest payment until October of 2020 unless the Cares Act becomes extended. The credit status of the loan will continue to report as it had been reported in March during the duration of the deferment.

If your income has been affected; this gives you time to look for employment. If not, this can be a time where you can add extra money toward your payment because you will not have to pay interest. That will allow you to knock down some of the principal. You can also call your loan servicer to ask for a re-calculation if you were on an income-based repayment plan and your income was affected.

If your student loan account was delinquent before the Cares Act; this can be an opportunity for you to add the extra interest that you would have been paying to the delinquency amount to bring it current. For those who were on a loan rehabilitation plan where you are required to make 9 payments in 9 consecutive months; the deferred payment months will continue to count towards eligibility for the program as if payments were made even though you are not required to pay until October.

This Cares Act does not affect Private Loans that aren’t owned by the government. You can contact your private loan servicer to see if they are offering any remedies if you’ve experienced hardship due to Covid-19. One method you can use to convince your private loan holder to offer you something helpful can be to share with them that you have a right to consolidate your private loans into one Federal loan and it seems that is your only option. In that case, they may be persuaded to work with you.

The Below are resource links to guide you to find out more information about the Cares Act:

Department of Education: https://www2.ed.gov/about/offices/list/ope/caresact.html
Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov/about-us/blog/what-you-need-to-know-about-student-loans-and-coronavirus-pandemic/
CFPB Credit Reporting Guidelines: https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-credit-reporting-guidance-during-covid-19-pandemic/
SLBA (Student Loan Borrower Assistance: https://www.studentloanborrowerassistance.org/help-for-private-student-loan-borrowers-during-covid-19-crisis/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+studentloanborrowerassistance%2FyPwH+%28Student+Loan+Borrower+Assistance%29
Forbes Article on Private Loans: https://www.forbes.com/sites/adamminsky/2020/05/19/student-loan-servicers-are-dinging-credit-reports-for-the-cares-act-forbearance/#66a9da8d65fa

Morning, maybe you’re laid off or know someone who is laid off due to COVID-19, or maybe you’re at home with pay but have a lot of extra time on your hands. Below, I’ve gathered a few tips to help financially and with peace of mind regarding the COVID-19 pandemic.

Take advantage of Work from Home Jobs:
Many companies hire people to work from the comfort of their own homes. Some of these companies have not been affected by COVID-19 such as customer service, content creation, and other jobs that can be done from home. If you have the skills and the time, consider taking advantage of a work from home job. If you’re off with pay; you’ll have extra income to devote toward that side hustle that you’ve been trying to get off of the ground.

If you have no income, you’ll be able to have money to continue coming in to take care of your essentials. You can work from home until you find the job you want or maybe working from home will become the job you want. Take a look at the link below to utilize reputable work from home job opportunities: Click here

Concerned about Keeping Your Mortgage Up? Request a Forbearance:
If you’re off without pay, you may be concerned about your mortgage payment or even your rent payment. You can have some peace knowing that FHA, FannieMae, and Freddiemac have instructed their mortgage services to delay receiving payment during the COVID-19 crisis for homeowners affected by the crisis. This means that if you’re a homeowner, who cannot pay your mortgage, you can simply call your mortgage servicer, and request a forbearance. A forbearance is a delayed payment or drastically reduced payment because of a reputable hardship. Its purpose is to give the homeowner more time to figure out their financial situation without having to worry about foreclosure or eviction.

Buildings with loans backed by FHA, FannieMae, and FreddieMac are also encouraging landlords not to evict renters who cannot pay at this time. They will give the landlord a forbearance if he is unable to collect the rent to pay the mortgage on the building insured by one of the three housing insurers. Talk with your landlord to see if this is an option for you. Let them know you are having trouble and see what agreements you all can come to. Also, see if your state has any rental assistance programs.

The norm for a forbearance due to COVID is 6 months. After 6 months the homeowner can be re-evaluated for an additional 6-month forbearance lasting up to 12 months. After the agreed-upon term; you will have to begin making payments again so use the forbearance time to look for employment to be gainfully employed by the end of the forbearance so you can work with your lender to become current again.

Note: Any delay of acceptance of payment is only temporary and meant to give you time to begin paying again rather it’s for rent or mortgage. Use this time wisely to earn and stack up income.

Consider a High-yield Savings Account
COVID-19 is a reminder that as the adage goes, stuff happens. One of the most important reasons to establish a saving plan is because we often have no idea when emergencies will happen. Cars break down, tires wear out, Water-heaters burst or furnaces stop working. Instances of emergency show us how faithful we’ve been with our money during times of harvest.

Have we put away for emergencies like we know we should do, or have we spent it just because we had it? I am a strong proponent of living underneath my means to save for the future and to accomplish things important to me. It could be something as simple as traveling twice a year. If that is a goal of mine, then saving intentionally will be a way to do it.

I encourage you to open up a high-yield online saving’s account to not only save but to earn interest on your savings. Since I switched to an online saving’s, I’ve been paid at least a few dollars per month for having savings in my account. Those few dollars add up. Pretty soon, it will be enough to pay for dinner on my vacation. I encourage you if you can put your stimulus funds into a savings account, and to commit to saving as close to 10% of your income as possible in a high-yield saving account. I recommend opening a saving that does not require a minimum balance and has no monthly payment. You can start by depositing your stimulus check into savings if your needs are already taken care of. Here is a list of high-yield saving’s accounts online: https://www.bankrate.com/banking/savings/rates/

Consider an Emergency Budget:
An emergency budget covers your bare essentials only such as food, shelter, and utilities. For a temporary season, you may have to cut the cable, gym, clothing, entertainment, and other subscriptions to re-purpose those funds toward the bare essentials.

If you had a high-paying job and now you’re underemployed or receiving less on unemployment, if you cut the additional expenses, at least you will have a roof over your head. Even if you’re on a forbearance plan with your mortgage because unemployment isn’t enough to cover your full mortgage payment, set aside a portion that you would have paid toward the mortgage in a separate savings account. For example, if your mortgage is normally $1,000 monthly, but with unemployment, you only have $500 a month left over after buying your bare essentials, deposit that $500/month into savings account as if your mortgage payment is $500.

This will help to keep you in a mindset of paying your mortgage/rent and it will give you leverage to negotiate with when your forbearance is over. You may be able to do a repayment plan, get a partial claim, which is like a loan to cover your arrears from your mortgage that you’d pay off after you pay your primary loan. Thus, the $500 you’ve saved monthly can be utilized for emergencies in the future and may not need to go toward the mortgage at all. For more in-depth knowledge regarding mortgages contact your local HUD-approved housing counseling agency at the link: Click here

For information about rental contact your local legal aid office.

People often co-sign for children or even friends when they have bad credit or no credit at all. However, co-signing is a bad idea that the Bible warns against. Let’s go back to the book of Proverbs:

There’s danger in putting up security for a stranger’s debt; it’s safer not to guarantee another person’s debt – Proverbs 11:15 (NLT)
My son, if you have put up security for your neighbor,
if you have shaken hands in pledge for a stranger,
you have been trapped by what you said,
ensnared by the words of your mouth.
So do this, my son, to free yourself,
since you have fallen into your neighbor’s hands:
Go—to the point of exhaustion—[a]
and give your neighbor no rest!
Allow no sleep to your eyes,
no slumber to your eyelids.
Free yourself, like a gazelle from the hand of the hunter,
like a bird from the snare of the fowler. – Proverbs 6:1-5 (NIV)

The above scriptures warn of the seriousness of co-signing for someone. Putting up security or shaken hands in pledge represents a contract, covenant, or an agreement. In short, the one who co-signs for another agrees to pay that person’s debt if they do not pay it. The person who co-signs assumes the risk of the one he is co-signing for because the person he is co-signing for either has no credit history or bad credit history.

If a person has a bad credit history; he will have to devise and execute a plan of paying down debt until it is all paid off to correct his credit history or look into filing bankruptcy and rebuilding his credit.

A person with no credit history will not be able to take out certain loans like a mortgage. She will have to begin to establish a credit history. One of the best ways to begin to establish a credit history is through a secured credit card. A secured credit card is a card that has a balance that is secured by an amount a person has in a bank account. For example, a person with no credit can visit a credit union or a bank and ask to apply for a secured credit card. She then will open an account with a specific dollar amount. The person’s credit limit will be the dollar amount that’s in that account. If $500 is the agreed upon amount; $500 has to be in that account at all times as long as the credit card is open.

The person with the secured credit card needs to practice the good credit habits mentioned in the previous post such as keeping the balance below 30% or between 0%-30%. That would be between $0-$150 in this case. The person with the secured credit card should only buy what is needed not using the card for wants or frivolous purchases. Purchase something needed such as gas in the car each month. Then pay what was spent on gas off completely. After doing this over a period of time, the credit rating of this individual will go up. At that point, other credit will be made available to this individual.

Parents can direct their children to build credit in this way; instead of co-signing for them for purchases. This will give them a sense of responsibility, and assist them in building their credit so they no longer need a co-signer. Co-signing is for those who do not mind paying their bills and someone else’s’ bills. However, most people do not make enough money to carry their debt and someone else’s; so don’t co-sign.

You know the Word of God is just bomb! It has something to say on every single subject under the sun. Shout out to my daddy up in heaven, who used to always say, “Read the book of Proverbs. It has so much wisdom on everyday life.” My parents used to read the book of Proverbs to us all the time for the above-mentioned reason, and because of that the below scripture is my center scripture when it comes to borrowing and credit:

​The rich rule over the poor and the borrower is a slave to the lender. – Proverbs 22:7

I don’t know about you all, but I don’t like being a slave to nobody! Therefore, this scripture is always in the back of my mind when I consider any type of borrowing. Thus, I only borrow what I need, and I only borrow what I know I can pay back. Why? Because I don’t want to spend the rest of my life working to pay someone else. I want to work and pay myself.

Below are some things that lenders look at when they are considering loaning to a person. They want to assess the risk factor in loaning to an individual. The things they look for have a lot to do with discipline. The above scripture induces discipline in me when I think about money:

How much debt:

A person who doesn’t have too many lines of credit open shows that he may be more responsible in how much debt he is willing to take on. He may not be such a high risk to loan money to in the future. Whereas, a person who is always getting credit cards and opening up new lines of credit has a greater risk of default. This may affect his credit score negatively and cause lenders to think twice about lending to him.

How high the balances are:

This goes to the point of not living above one’s means. If the balances on the credit lines are too high; It may be a red flag that the consumer is not a good manager of credit and thus could pose a risk when considering loaning money to this person. As a rule credit utilization of your lines of credit should always be as low as 30-50% of what has been made available to you. This means if you have a $10,000 credit card, you should spend no more than $3,000-$5,000 of that credit card per month. Never spend over 50% of what you’ve been approved for. That would make you high-risk.

That is a bit of an extreme example because I don’t believe anyone should be putting $3,000-$5,000 on a credit card each month. It’s a good rule of thumb to only spend what you can pay off in full or in a few months of payments. Practicing this consistently will add to a high credit score. Paying it off in full each month or paying it off as agreed will build your credit. Remember, if you pay your credit card off in full each month, you don’t have to pay interest. You only pay interest when you carry a balance.

Length of Debt:

How long have you had the lines of credit open? How long has it been since you opened a new line of credit? If you’ve had an account open for a good length of time that you’ve been paying consistently; It shows that you can make payments on time. It’s not good to open too many lines of credit at one time. For example, if you are shopping for a house, do not shop for additional credit at that time besides mortgage loans. Opening credit while applying for credit such as a housing loan can cause a denial.

How many inquiries are on credit report:

There are soft and hard pulls on your credit. A soft pull comes from a company that views your credit in order to maybe make a contract with you or something, but not to extend credit. Companies that make soft pulls are cable, cell phone, and insurance companies. They pull your credit for informational purposes only.

Hard pulls are when your credit is pulled for the purposes of extending credit such as credit card companies, banks, etc. The hard pulls show up on your credit report, but the soft pulls do not. If a person has too many hard pulls on their credit report; it will lower their credit score.

Your Credit Score:

Your credit score is the overall grade of your credit history. The 600s are average, while the 700 and 800s are very good scores. Anything below the 600s isn’t good. Your credit score is based on the above-mentioned things plus any delinquencies or judgments on your credit history. You can find out more about your credit score by visiting the website: FicoScore Fact Sheet

https://www.fico.com/en/latest-thinking/brochures/fico-score-fact-sheet

Delinquencies:

Delinquencies are when people fall behind on making the agreed upon payment. Those who become delinquent are normally charged late fees, and depending on the type of delinquency may be in danger of losing the asset he/she is delinquent on such as a house or a car. Delinquencies can result in judgments which are certain amounts of money owed to the entity who has sued the individual. Judgments and delinquencies appear on the credit report. They normally remain on the credit report for 7 years. Bankruptcies are also a form of a judgment that will remain on the credit report for 7 years.

Credit reports can be checked once per year for free at annualcreditreport.com. You will not get your score at this website though. You may get a copy of your credit report and score for free if you apply for credit. There is an act that requires the lender to send you a copy of your score and allow you to view your credit report for free. I believe they have 30-60 days to show it to you.

Being aware of your credit/borrowing habits, and making disciplined choices in only borrowing what you need, maintaining low balances, not opening too many lines of credit, and paying off your monthly debt, or at the least paying as agreed makes one a great candidate to borrow when necessary.

When I was a teenager, I always had everything I needed, and what I did not have, God made a way for me to have. I would sow from the little that I got. If I had $5, I sometimes gave the whole $5 away. To others, it was sowing small, but to God, it was sowing richly because I was willing to give all that I had. I do believe that God uses the purity of our hearts in giving to show us that we will lack nothing when we are willing to give.
​
Giving and sowing seed is not something that we just do in church. God may place it on our hearts to give to someone at the gas station or a woman who comes up to us saying she doesn’t have money to feed her kids. God uses his people on earth as instruments to give where there is a need. We have to have a sensitivity to know when and where God is calling us to give.
Now that we’ve learned that it’s okay to be wealthy; and that it’s God’s will to make us wealthy to show people about him in the earth. Let’s take a look at some Biblical principles and promises below for the one willing to sow:

Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. – 2 Corinthians 9:10

It’s God that gives us money to sow. He is our source not only of life, health, and strength but of money as well. He gives money to the one who has a willing heart to be obedient in sowing. One who is consistent in allowing his/her heart to be soft toward the tug of the Lord to give money where God leads will always have extra money coming in from God. Note: Again, this does not only mean to sow into the church offering. Being obedient in tithes and offering is a given, but God wants to show his love to others outside of the church. Allow God to make you sensitive to sow.

Whoever is generous to the poor lends to the LORD, and he will repay him for his deed. – Proverbs 19:7

This is an awesome promise that I’ve seen manifested in my life. I’ve given to poor people and seen God give it right back to me as if I’d borrowed some money from him and I was being paid back. I remember one example in particular. I gave $30 to a pair of homeless people toward a hotel room, and the next day God had a $20 laying on the ground in a Jewel parking lot for me of which I picked up. He also paid me the rest later. God is faithful to his word not only as it relates to salvation, but also as it relates to money.

Do not be deceived: God cannot be mocked. A man reaps what he sows. – Galatians 6:7

People have come up with something called Karma, which is a bite from the word of God. They don’t wanna give my God his credit, but the principle of sowing and reaping comes from God. This can relate to money, but it also relates to life in how we treat others. God will not allow us to sow and not reap. It is a mockery of his character to do so.

Cast your bread upon the waters, for you will find it after many days. Give a portion to seven, or even to eight, for you know not what disaster may happen on earth. – Ecclesiastes 11:1-2

The above scripture speaks to those who are afraid to sow. They hold on tightly to all of their money always expecting something bad to happen. Let me tell you; it is wise to save money for a rainy day, but there is such a thing as not trusting in the Lord to preserve and sustain us. There is such a thing as trusting only in our savings and riches. God doesn’t want us to trust in our money, but He wants us to trust in Him. Don’t be afraid to give when God lays it on your heart. Not only does God want us not to be afraid to give, but he wants us to be okay with diversifying our giving. The scripture is saying give some here and there. Don’t just sow into one pot. Be led by the Spirit and wisdom. It’s okay to give.

Living beneath my means is something I learned from my parents. They had 5 kids plus my elder sister who was still-born. Because my parents had to raise 5 kids they could not spend up all of their money on whatever they wanted because they had responsibility.

Therefore, they’d save money by spending less. Living beneath our means doesn’t necessarily mean doing without. It just means getting what we need at the most economical price so there will be some left over for emergencies or just to have if we want to use it for something.

My parents lived beneath their means by shopping at the thrift store for our clothing and toys as we were consistently growing children. My mom would also call around and get vouchers for some of the various thrift stores where we’d be able to pick out three outfits for free.

Living beneath our means can also mean waiting until we’ve saved up enough for that big purchase that we wanted instead of financing it or spending money that we did not already have. Personally, I don’t believe it’s wise to spend money that I don’t have. Now, there are certain purchases where we have to do this such as a house and in some cases a car, but even with a car we can still save.

I don’t believe it’s a good habit to form when we spend what we do not have consistently. I believe we need to carefully count up the cost of big purchases. In doing so, we can plan for the purchase so that we will minimize our monthly debt when we finally proceed with the purchase. For example, I was working two jobs for a few years not because I had to, but because I love kids and wanted to pour into kids.

Thus, I took an abstinence educator position where I taught in schools twice per week during the school year for 4 years. The checks I got from that went into my savings account; while my full-time job went into my checking account. I lived off of the full-time job and saved from the second job. When my car at the time gave out; I had a large down-payment on the car paying over 50% of the balance of the car. Because of that, I was able to pay my car off in a year. 

I lived below my means all that year not getting any sew-ins. I took all of my extra money and put it on the car payment each month until the car payment was no more. I never made the agreed upon payment. I always paid more. Paying more on monthly payments is a quick way to decrease and eliminate debt while saving money on interest each month. Only purchasing what is needed such as food, gas, utilities, and housing for a period is a way of living beneath our means. It allows us to do without some of the things we may want for what we need and in turn, allows us to pay off debt sooner. Paying off debt sooner frees up more money in our monthly budgets to do what we want.

Finally, living beneath our means also means not buying the most expensive item available. Instead of buying a new $20,000 car, I found a car that was nice and to my liking for under $10,000. We don’t have to have the most expensive car or fit in with what our friends are able to afford. I personally don’t care what my friends are able to afford. I have to be responsible for myself. I know I’m the type of person who likes to go on trips here and there exploring and sight-seeing; therefore, I intentionally do not commit to overspending. I intentionally commit to sticking to a budget.

Now, sometimes things come up, for example, I recently had to spend more than I wanted with three different mechanics trying to get my car to pass the vehicle emissions test in time to have my license plate renewed, but that was an emergency. There was no way to get around that. Living under our means helps us to more easily take care of those emergencies and still do some of the things that we really want to do.