The June 2020 jobs report provided some hopeful news for a season that was desperate for many. The national unemployment rate dropped to 11.1 percent from a post-Great Depression high of 14.7 percent in April, exceeding the estimated 12.4 percent. The economy showed a record number of jobs in June with an employment increase of 2.9 million jobs. This total is the largest single-month gain in U.S. history. These are all numbers from which Americans can draw relief and, most importantly, hope.
As you might imagine, however, that’s barely the tip of the iceberg for weathering the devastating effects of COVID-19 here and around the world. Millions of individuals and families here in America continue to tough it out. Figuring out what federal programs are available following a layoff or furlough is never easy, The situation worsens when many workers report difficulties filing for unemployment due to unprepared state agencies being overwhelmed by applications or workers seeking general help. In addition, the benefits for which workers are eligible vary by state, and those benefits might not add up to a livable income for one’s daily or monthly needs. That’s where financial literacy can help.
America’s credit union members and consumers need more financial options overall, especially for those furloughed workers who, while still technically employed, are off the job and remain unpaid for an indeterminate amount of time. They need assistance, and credit unions are designed to help if they have prioritized their short-term, alternative lending programs appropriately.
Times are tough for furloughed workers, and we gladly present these financial literacy tips for helping your members get through their unpaid leave:
Grab some extra time with a balance transfer credit card
While part of the application will likely be based on income, using a balance transfer credit card, a zero-percent introductory offer or a balance transfer offer on a current credit card may enable your member to capitalize on a low- or no-interest period. Just remember: the key to achieving success with this option is keeping track of what they are charging on this card (essentials only) and when they will pay it back. The best practice would be to pay it off before the favorable interest period comes to an end.
Set a furlough budget
Hearing a credit union member was furloughed, much like getting laid off, can be a punch to the gut. At the same time, it’s important to reinforce that putting together a budget is the best possible plan of action. Having a budget and overall plan also lessens the stress and mental burden of such a significant lifestyle change. Take a close look at their monthly spending habits: eliminating all non-essential costs is crucial. If their furlough situation worsens, walk them through eliminating further costs. Encourage eating homemade dinners, canceling digital subscriptions and killing that gym membership. It’s “go time” on cutting out any existential threat to your members’ financial health and living circumstances.
Invest in a small dollar loan with your local credit union
According to a report by the Financial Health Network, 70 percent of U.S. adults are financially unstable or unhealthy in some way — and that was before the devastating effects of COVID-19.
2020 is an important time in the history of financial literacy and wellness in America. Credit unions’ capacity, capability, and duty to outwardly promote and offer a stabilizing small dollar lending program is crucial to helping members and community consumers bring steadiness and balance to their personal finances.
QCash Financial’s COVID-19 Financial Relief Program is an integrated, SaaS-based mobile lending credit solution meant to reach your members in need of instant liquidity. Using a relationship-based underwriting engine rather than a simple credit score, our mobile solution allows for virtually instantaneous loan approval while loan amounts, terms, and fees are fully configurable by your individual credit union.
Through the end of 2020, the program waives all fees* for qualifying credit unions that use these core banking systems.