With COVID-19, I am able to work from home and have not any reduction in income.
What is my best option?
-S.
Dear S.,
For scores of people who are struggling right now, forbearance offers much-needed relief.
Payments are suspended through Sept. 30.
No interest is accruing.
But Im not convinced you should do either of these things.
You say youre able to work from home and havent lost any income.
I sincerely hope your situation stays this way.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
The crisis were in has taught us just how essential it is to have an emergency fund.
Try putting your usual payment toward the highest-interest balances you have.
If you pay off the highest-interest balance, move onto the one with the next-highest interest rate.
In debt payoff circles, this is known as thedebt avalanche method.
Did you know?
Of course, private student loans arent covered by the automatic forbearance.
If youre on anincome-driven repayment plan, your suspended paymentswill count toward forgiveness.
If you left either program, you could then apply the money you saved toward your loans.
Student loans are an already complex topic, but the temporary forbearance makes it even more confusing.
Whether you put your freed-up cash toward savings or debt, youll be making a wise decision.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder.
Send your tricky money questions to[email protected].
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
