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7 tips to get through a coronavirus furlough

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Matthew Goldberg

It doesn’t matter the industry or the occupation, a furlough can happen to just about anyone.

That’s why it’s important for those dealing with the financial difficulties of a recent coronavirus-driven furlough to know there are a number of ways to try and stay afloat when you’re not receiving your normal pay.

Even if you’re lucky enough to still have your job today, it may be in your best interest to take some proactive steps to plan ahead in the event a furlough, or lay off, impacts you in the near future. Facing the economic uncertainties of a pandemic, it’s entirely possible that you could potentially be the victim of an employment interruption at some point.

Here are seven tips for surviving a furlough in these tough times.

1. See if you’re eligible for unemployment insurance

Take advantage of benefits available through the CARES Act or unemployment insurance benefits. The U.S. Department of Labor has answers to some of your eligibility questions.

Pandemic Unemployment Assistance (PUA) may be an option for those who wouldn’t normally qualify for regular unemployment compensation.

“The Federal supplement to the state unemployment benefits now makes a big difference,” says Mark Meredith, certified financial planner at Meredith Wealth Planning in Maryville, Illinois.

States give an additional $600 weekly payment to eligible individuals receiving other benefits under Federal Pandemic Unemployment Compensation (FPUC).

2. Your bank or lender may provide short-term savings options

Many banks are waiving certain fees or allowing borrowers to defer making payments.

For homeowners, a monthly mortgage payment is usually one of the highest expenses. A mortgage forbearance takes a big expense, temporarily, off of a person’s plate if they’re eligible.

“This could be a good way that you could potentially reduce your monthly outflow towards living costs,” says Amar Shah, CFA, certified financial planner and founder of Client First Capital in San Diego.

Those with federal student loans can take advantage of the CARES Act, which automatically stops student loan payments until Sept. 30. During this time interest is being temporarily set at 0 percent.

Unfortunately, private student loans aren’t covered under the CARES Act.

Bankrate is tracking how many of the largest banks are helping their customers. See if there’s a way that your bank can help you during this emergency.

3. Set a furlough budget

Cut back on spending now to either survive your furlough or prepare for one. Budgeting is the best way to see where your money is being spent.

“Take a close look at your monthly budget,” says Greg McBride, CFA, Bankrate chief financial analyst. “Identify which items you could cut back or eliminate right now. And identify those items you could cut back or eliminate if conditions get even worse.”

Making meals at home, instead of getting delivery or takeout can save you money. Also, you may be able to cut costs by analyzing your subscription services, gym memberships and other expenses that are on autopilot.

Also, reevaluate your fixed expenses. It’s not uncommon to switch auto insurance and homeowners insurance providers and save $500-$1,000 a year, Meredith says. Your cell phone bill might be another area of opportunity.

“I think people, when they’re so ingrained in their work lives they rarely have the time or desire to look into it very deeply,” Meredith says.

4. Balance transfer credit cards can buy time

This emergency can be a little easier to handle if you have more time. More time can help you save, cut your budget and hopefully find a steady income. There are a few lending tools that can do this.

Consider using a balance transfer credit card, a 0 percent introductory offer or a balance transfer offer on an existing credit card.

One caveat is that part of a new credit card application will likely be based on your income. So those who still are employed may be in a better position to take advantage of a low or no-interest period. Some banks may charge an upfront fee of 3 to 5 percent to take part in these offers. If you don’t have the best credit, a personal loan is another option for getting the funds you need.

Be aware of what you’re charging on this credit card and have a plan for how to pay it back — preferably before the favorable interest period ends.

“Limit it to essential spending only,” McBride says.

Keep in mind, losing your paycheck is an emergency.

“So, somebody who’s already been laid off, this is a time when it’s OK to make the minimum payment on your credit card,” McBride says.

5. Try to avoid touching your retirement savings

You may qualify to take a penalty-free withdrawal from an eligible retirement plan, such as a 401(k). But these withdrawals should only be an absolute last resort. Some coronavirus-related withdrawals won’t have a 10 percent early withdrawal penalty if they’re made in 2020. But keep in mind that you’ll still have to pay taxes on these withdrawals, though you may be able to spread these payments out. Also, you could use a Roth IRA as an emergency option if other options aren’t available. Contributions from a Roth IRA can be withdrawn at any time.

A $10,000 withdrawal from your retirement account today could be $57,000 in lost retirement savings 30 years from now, McBride says. That’s based on a six percent annual rate of return.

Annual contribution limits and the fact that you might never replenish these retirement funds are also reasons to avoid this route if possible. A per

6. Find saving opportunities

Try to keep adding to your emergency fund, if you have one, and are still working.

“Do that with any stimulus check you may be receiving, your tax refund and with the discretionary spending you’re not doing,” McBride says. “It’s the money that’s not being spent in restaurants, at movie theaters or ball games — is money that you can be putting into savings to pad your cushion.”

Look for other ways to try and replace income, if necessary. It’s OK to dip into your emergency savings if you’re furloughed right now, since this is an emergency.

Even if you entered this furlough without an emergency fund, hopefully spending cuts can help you create one on the fly. Consider keeping these funds separate from your normal checking account. Keeping it separate can prevent it being spent and may help you earn more interest. (Compare savings accounts on Bankrate to find the right one for you.)

7. Achieve a goal during furlough

You’d rather be receiving paid time off or be working. But you can’t control being furloughed, so it makes sense to use this time wisely. This could be a good time to complete a project around the house or achieve a career or personal goal. These items could help you improve the value of your house or improve yourself for a future job. You might be able to find an interesting (and possibly free) webinar, virtual learning experience or online group related to your professional development. Also, look into finding organizations or societies related to your career, if applicable. The organization, or some of its members, might be going through the same situation and could offer helpful advice.

Perhaps it’s also a good time to update your resume in case the furlough turns into a layoff down the road. It might also be a good time to reconnect with old colleagues, your professional network or your alma mater. Catching up virtually or on the phone seems more commonplace with at least parts of the U.S. on pause and under stay-at-home orders.

“Now [that] you have this extra time,” Shah says. “Make sure you’re capitalizing on it.”

Prepare for future furloughs or a permanent job loss

Spending every cent wisely has never been more important. Keep your spending to the essentials as much as possible.

“None of us knows exactly what the road ahead entails,” McBride says.

Those that are still employed or are only furloughed with reduced hours or pay should use budgeting to save even more.

This article was published at Bank Rate on April 23, 2020. Reprinted with permission. 

About the Author: Matthew Goldberg is a consumer banking reporter at Bankrate. He graduated from Illinois State University with a bachelor’s degree in mass communication and earned an MBA at William Paterson University.

He began his writing career in 1998 at Sun Publications in Crystal Lake, Illinois. He was sports editor at The Daily Vidette, a sports reporter at The Journal Standard and a sports writer at The Quincy Herald-Whig. His work has also appeared in Sports Illustrated On Campus. He has been honored by both the Illinois Associated Press Editors Association and the Illinois Press Association.

He also has more than seven years of financial services experience, in both banking and insurance.

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Millions of People Can’t Pay Rent Tomorrow. Here’s How Some Are Organizing.

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Image result for mindy isser

As April 1 looms and the first rent payment since the start of the coronavirus pandemic becomes due, countless people wonder how they’ll be able to afford to pay. Since the start of the coronavirus crisis, millions have had their hours cut, been furloughed, or laid off. A whopping 3.3 million have applied for unemployment benefits, and some say the unemployment rate could reach 30%. To put that in perspective, the unemployment rate during the Great Depression was 25%.

The cost of rent has skyrocketed the past few decades, while the federal minimum wage hasn’t been raised since the $7.25 wage took effect in 2009. And as worker productivity has soared to new heights, studies show that wages have stagnated across the board. This has been a problem for working people even in times of normalcy—in expensive urban cores like New York, Los Angeles and San Francisco, many bounce from friends’ couches to shelters and even sometimes to their own cars. But in the wake of the coronavirus pandemic, the housing crisis is understandably exploding: Those who were able to just barely pay their rent before are now scrambling to keep the landlord at bay.

Housing activists have been calling for a reprieve on evictions during the coronavirus pandemic, and numerous cities states have reacted quickly, placing a temporary moratorium on evictions or a pause on housing court. But none yet have frozen rent payments, and tomorrow is April 1—and the rent is due.

While the fear and panic that people may feel when they’re unable to pay their rent or mortgage can seem individual and unique, it’s actually shared between the millions of others who are in the same boat. Right to the City Alliance, a national network of more than 80 racial, economic and environmental justice organizations, is hoping to turn that collective anxiety into collective action. The alliance is calling for an immediate cancellation of rent and mortgage payments through the duration of the public health and economic crisis for all renters, homeowners and small businesses and a three-month recovery period. These demands expand beyond a rent and mortgage freeze and include calling for the immediate release of those being held in pre-trial and immigrant detention, an indefinite suspension of utility shutoffs, and a guarantee of unemployment insurance, sick time, paid leave, health care, and a living wage for all workers.

For many, rent cancellation is urgently needed to ward off personal financial catastrophe. Coya Crespin of Community Alliance of Tenants of Portland, Oregon, said in a statement, “As a pregnant single parent without any savings, and now schools being shut down, it has been difficult keeping my kids fed. Many of the members of the housing organization I’m a member of have been contacting me afraid of not being able to pay rent in April. The stimulus package check that politicians are lifting up as a solution doesn’t even cover one month’s rent in most cases. People are beyond stressed. I’m beyond stressed.”

Many of these demands have been voiced for years, but have been popularized by the Bernie Sanders campaign and the #HomesGuarantee platform, which would implement a national rent control standard and a just-cause requirement for evictions.Even presidential candidate Bernie Sanders agrees that “along with pausing mortgage payments, evictions, and utility shutoffs, we must place a moratorium on rent payments” during the coronavirus pandemic. And because President Trump’s recovery proposal is a paltry $1,200—not even enough to cover rent in many cities—tenants (and even some homeowners) are being forced to make a public declaration that, without more aid, they can’t (and won’t) pay. Housing activists are using this moment of true desperation to demand the support they deserve—but there are some disagreements on the way forward.

While Right to the City Alliance is pushing for an immediate suspension of rent and mortgage payments throughout the coronavirus crisis, and for a three-month period after it ends, others are calling for rent strikes if the government doesn’t act. David Cardenas, National Field Organizer at the Right to the City Alliance, said his network is “supporting a diversity of tactics in the alliance.” Rent Strike 2020, a new organizing campaign working in partnership with Socialist Alternative and the Rose Caucus, a group of socialists running for both state and federal House and Senate seats, is demanding “every Governor, in every state: freeze rent, mortgage, and utility bill collection for two months, or face a rent strike.” Tenants in New York are waiting for Governor Cuomo to provide some relief, but are prepared to take matters into their own hands and go on a rent strike if he does not act.

Davin Cardenas, National Field Organizer at the Right to the City Alliance said, “We see rent strikes as a collective action that comes from deep organizing on the local level and some of our member organizations are going to use that tactic. We need people to come together, organize, and join the movement for long-term and transformative struggle so we can fundamentally change the housing system and win homes for all.”

The Philadelphia Tenants Union, in its COVID-19 Tenant Organizing Guide, urges people to be strategic and think long and hard about what their demands really are: “A rent strike is a tool, not a demand,” the guide states. It specifies, “In a situation where the demand is ‘stop collecting rent from me,’ it’s questionable how effective a rent strike would be. To put it another way, how does withholding rent pressure a landlord to suspend rent?”

There are a number of tactics being put forward in this moment, but one thing is for certain: In the face of the coronavirus pandemic, the housing movement is empowering tenants to take big and bold action. No one can predict what will happen on or immediately after April 1, when millions potentially don’t pay their rent, but Cardenas said, “It’s not likely that we’ll see relief, and even the relief that comes in before May 1 won’t be sufficient for what our families need across the country. There is not going to be a return to normalcy or a return to business as usual.”

To sustain any long-term movement—and to win real power for tenants—it’s going to take more than one-off rent strikes or single issue demands. It’s going to take building powerful, working-class organizations. The Philadelphia Tenants Union, in its guide, writes “Building strong, durable organization among tenants where there is an abundance of leaders and widespread trust yields the most successful and lasting results.” This must be the lesson for our movements going forward. April 1 may indeed be a pivotal moment in a growing housing movement that is being propelled forward by the crisis of this moment. How we help to steer the real hardships that so many workers are facing into a sustained and determined fight in the days that follow, however, will determine whether we can transform this moment of collective suffering into collective power.

This article was originally published at InTheseTimes on March 31, 2020. Reprinted with permission.

About the Author: Mindy Isser works in the labor movement and lives in Philadelphia.

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Furloughed workers rally in the rain to end the GOP shutdown

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seiu-org-logoToday hundreds of furloughed federal workers gathered by the Capitol in pouring rain to protest the reckless government shutdown in a rally organized by the Congressional Progressive Caucus (CPC).

SEIU Executive Vice President Eileen Kirlin spoke about the damage the shutdown is causing to working people who rely on federally-funded services like Head Start, as well as to federal workers who arefurloughed or working without regular paychecks for the duration of the shutdown.

Andrew Sailes is one such worker. Andrew is a SEIU NAGE member and a Department of Defense civilian employee whose work as an electronic measurement equipment mechanic ensures our troops have working vehicles. He was furloughed over the summer because of the sequester cuts and was furloughed again because of the shutdown. Andrew is back to work under the Pay Our Military Act, but because of the shutdown, his program doesn’t have enough funds for him to do his job properly.

Many Members of Congress joined SEIU and fellow union leaders in speaking out, including Minority Leader Nancy Pelosi (D-CA) and CPC co-chairs Reps. Keith Ellison (D-MN) and Raul Grijalva (D-AZ).

This article was originally printed on SEIU on October 10, 2013.  Reprinted with permission.

Author: Jill Raney, SEIU organizer.

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