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By Barbara O’Neill, Ph.D., CFP®, AFC® [email protected].

Six months into the pandemic, Personal Financial Management (PFM) staff are helping military families stay afloat financially and emotionally. Starting in August, the $600 per week of federal unemployment benefits will go away, causing a “cash cliff” for unemployed military spouses.

Moratoriums on utility shutoffs, foreclosures, evictions, and other leniency measures are also ending (or soon will be), putting further stress on the finances of families that have fallen behind on payments. Balancing work and children at home is also a big challenge.

Woman and child wearing mask

Photo by August de Richelieu from Pexels

To help military families cope with COVID-19:

  1. Assist with a Battle Plan– Help clients make a master list of “must do,” “should do,” and “don’t have to do” activities. This will help them prioritize their use of time and money and sequence steps they need to take to get things done. Mental bandwidth (i.e., thinking capacity) often decreases during stressful times, which makes it difficult for people to take positive actions and make good decisions.
  2. Assist with Scheduling– Give clients a sample daily COVID-19 schedule from Prodigy, a curriculum provider for educators, as a template and suggest that they create a time use schedule that works for their family. Adapt it for summer activities and school (either at home or at school) in the fall. Research studies and anecdotal evidence have repeatedly shown that adults and children alike need structure in their day to feel useful and keep busy.
  3. Assist with Reframing– Encourage clients to use scheduling changes related to COVID-19 as an opportunity to “take a pause” and examine what is important in their lives. Help them see “silver linings” in current events and to stay positive by identifying actions and events that they can control. Two key resilience characteristics that are helping people adapt to COVID-19 changes are creativity and flexibility.
  4. Assist with Credit Reports- Help clients access their credit reports, especially if they have taken advantage of leniency or moratorium arrangements with creditors. Under the CARES Act, creditors are required to comply with certain guidelines for reporting information and Americans can obtain a free credit report weekly from each of the “big three” credit bureaus (Experian, Equifax, and TransUnion). Clients should make sure that deferred payments are not being reported as delinquent.
  5. Assist with Budgeting– Help clients redo their budget to adjust for COVID-19 related changes to income and expenses. For example, reallocating money saved as a result of social distancing measures (e.g., travel and entertainment) and working from home (e.g. gas, tolls, train fare, and child care) to other expenses and increases or decreases in income relative to pre-pandemic earnings.
  6. Identify SOCOs– Explain that SOCO is “health speak” for “Single Overriding Communications Objective.” COVID-19 SOCOs include six feet distancing, wearing a mask, and frequent hand washing. Common financial SOCOs are paying basic needs first (i.e., food, rent, utilities, medication copays, phone, internet, and health insurance), reaching out for help when needed, and cutting discretionary spending.
  7. Encourage Human Capital Development– Encourage service members and military spouses to use newly found free time to learn new skills, obtain certifications or degrees as levers to new job opportunities, or to seek “side hustles” for additional income. Some courses are available online and can be taken from home to “fit in” around family responsibilities. An example is the AFCPE military spouse fellowship program.
  8. Avoid Unintentional Insensitivity- Be sensitive to the extra stress that COVID-19 has placed on families and avoid advising action steps that are technically correct but currently unrealistic. In addition, make recommendations as small and granular as possible. For example, research has found that people are more receptive to the idea of saving $5 per day for 30 days than saving $150, which is exactly the same amount.

For additional information about ways that financial professionals can assist clients who are experiencing COVID-19 stress, download the Center for Financial Social Work e-book Coping with the Financial Reality of COVID-19.