Relief for six-figure earners (who aren’t expecting a stimulus check)

Many folks are breathing a huge sigh of relief that the $2T stimulus bill has been signed into law. It means that those earning $99K and under in 2018 (or 2019 if you already filed your tax return) will get about a thousand bucks. It’s $1200 for those with an AGI of $75K or less and the amount decreases as you get closer to the $99K cut off.
 
But if you’re a six-figure earner whose income has taken a hit from the coronavirus shutdown measures, there’s no stimulus check to be expected in your mailbox.
 
Most people don’t know that six-figure earners are not immune to living paycheck to paycheck. There are even estimates that 10% of millionaires live paycheck to paycheck. In more expensive areas of the country, $100K really does feel like you’re just getting by. So if you don’t qualify for the stimulus check, but don’t have enough in savings to float you for the next 3-6 months (or potentially longer), what can you do?
 
Step 1:
Take comfort in the fact that you’re not alone. When up to 78% of Americans live paycheck to paycheck, that’s going to include a lot of high-income earners. That means there are hundreds of thousands of people who earn hundreds of thousands of dollars a year who live on the financial edge. Unfortunately, income and savings account balances are not necessarily correlated.

Step 2:
See what can be deferred. Call up you landlord or mortgage lender, car lender and car insurance company, credit card company, and utility companies to see if they can delay or give you a forbearance on your rent/mortgage and bills. Lots of them have sent out emails saying they’re working with people affected by Covid-19. Many of the banks announced that they’re offering a 90-day relief to homeowners, but you have to call and talk to them about it. The long wait on hold will probably be worth the aggravation.
 
Step 3:
Go through your bank account and credit card statement to find the recurring charges services or subscriptions that you can cancel.

Step 4:
Figure out your food budget because that will be your biggest survival expense. Can you live off $20/day? That’s about $600 a month for groceries AND dining out. Sure, that’s much less than you’re probably used to spending, but there will be no more fancy dinners out for a while, and you can survive on less take out. Yes, even you who eats every meal out! If you could figure out how to crack six-figures, you can figure out your way around a kitchen. Smoothies will be your friend. You’ll make simple dishes and in a few months, you’ll have your own cooking show that reaches thousands of people on IG live. I believe in you!
 
Now that you’ve trimmed down your bills as much as possible, let’s find more money.
 
Step 5:
One benefit of the stimulus is to expand who qualifies for unemployment insurance. Usually it’s reserved for the 9 to 5 types; employees only. But right now, gig workers, freelancers, consultants, and other soloprenuers qualify for benefits if their income has dried up or dropped down. There are restrictions, of course, but it doesn’t hurt to try. Even if you qualify, there is a waiting period so get on it ASAP instead of waiting until you’re already in dire straits.
 
Step 6:
Another allowance of the stimulus package is the option to borrow money from your IRA (or 401K, but you’ll have to ask your employer if it’s possible with their plan). You can borrow up to $100K without having to pay any taxes or penalties for early distribution as long as you put the money back in within 3 years. It’s an interest-free loan from your retirement account.

Step 7:
If neither of those work out for you, consider credit. It makes me cringe a tad to suggest it because credit is often the reason why we don’t have more savings in the first place, but desperate times call for desperate measures. Call your credit card company and see if they’ll increase your limit. (Maybe you should do that before you ask them to defer payment LOL).
 
You can also apply for a new credit card that has 0% APY introductory period. Just be sure to pay off the entire balance by the time that intro window closes.  Some of those cards will charge you interest on the entire balance that has ever been charged to the card, not just interest on the balance that remains when the intro period expires! Not cool – so watch out for that.
 
OK so in an effort to get this out to you as soon as I possibly can, I will forgo a thoughtful and articulate ending and just say that I’m here if I can offer any guidance. Stay strong and stay healthy!
 
All my very best,
Chelsea