This Week In Your Wallet: Use Your Judgment
The word — I whisper — channeling the late, great host of “Password,” Allen Ludden, (aka Mr. Betty White) is “judge.” You cannot escape it these days, whether you’re reading the front page of any newspaper on the effort to fill Ruth Bader Ginsburg’s seat, or sitting in front of a computer watching your local temple stream the last of the Yom Kippur services (judgment is big on the High Holy Days.) Even at HerMoney, where we take pride in being a judgment-free zone, it can be tough to escape it 100%.
This weekend I learned of a new usage for the word and felt the need to let all of you — particularly those of you with children in or applying to college — know about it, too. It’s called a “professional judgement review,” and it’s something that you ask of a school’s financial aid office when your financial situation has changed (due to unemployment, health, or any other reasonable factor that has altered your ability to pay). The big issue is that the FAFSA will pull your tax returns from 2019 — i.e. pre-pandemic — to determine your expected family contribution. And for many, many people that info paints a much-too-optimistic scenario.
But first, you have to fill out the FAFSA. It comes out on October 1, which is this coming Thursday. And once you file it, even before you’re admitted, you can reach out to the schools you’re most interested in and let them know you’ll need an additional look where financial aid is concerned. The other confounding factor in figuring out college financials is that scholarships and grants — often based on scores from standardized tests that have become tougher to take, and grades that have gone pass/fail in remote environments — is that merit aid is now much much tougher to predict. The New York Times’ Ron Lieber again suggests reaching out to schools that you have high hopes for to get a sense of what’s possible. But he also notes that colleges and universities are themselves struggling with this picture right now. It may be an exercise in frustration.
The bottom line: Start early. And then get ready for a bumpy process that could — and likely will — take well into 2021 to sort out.
MORE FROM HERMONEY: How to ask for more financial aid in the age of the coronavirus
If you’ve been considering a 401(k) withdrawal, you’re certainly not alone, but taking money out is a big decision — and it might not always be the right move for your situation. This week, Kailey Hagen writing in The Motley Fool offered up a good rundown — three reasons to take the withdrawal you’ve been considering, and two reasons not to. One of the reasons in the “to” column is that at the moment, there’s no early withdrawal penalty, thanks to the CARES Act. Ordinarily, if you took money out before age 59 and ½, you’d pay a penalty to the tune of 10%. Of course taxes will still be owed, unless the money comes from a Roth 401(k). (We’ve got a complete rundown on the blurred lines between loans and hardship distributions here at HerMoney.) On the flipside, you’re better off avoiding raiding your 401(k) if you’re not in dire need of the money, or if you could withdraw money from another source, like a Roth IRA.
MORE FROM HERMONEY: Should I stop contributing to my 401(k) and other investing FAQs answered
Deadlines You Can’t Afford To Miss
Tens of millions of Americans have now gotten their stimulus payments — up to $1,200 for individuals and $2,400 for taxpayers filing a joint tax return, plus $500 for each child who was under 17 at the end of 2019. But unfortunately, thousands of Americans still haven’t seen payments come through, and Under the Cares Act, stimulus payments must be made by Dec. 31. If people don’t receive the money by year’s end, they’ll have to wait to get the money until they file a 2020 federal return next year. So, what to do if your check is still MIA? The Washington Post’s Michelle Singletary offers us a rundown this week. Essentially, the IRS has set two deadlines to help get you paid by year’s end. The first is Sept. 30, for people who got a stimulus payment, but didn’t get the $500 per qualifying dependent. The second deadline is Oct. 15, for “non-filers” who never got their checks. Follow the steps to apply at irs.gov, and if that doesn’t work for you, contact the Taxpayer Advocate Service (TAS), an independent organization within the IRS. They’re assisting people in resolving issues with relief payments that never made it to the mailbox (or bank account.)
MORE FROM HERMONEY: How to really put that $1,200 stimulus check to work
Save The Date: Amazon Prime Day
And now, a deadline of a different kind: October 13 and 14 will officially be Amazon’s “Prime Days” this year. The company originally delayed its annual Black Friday-like sale due to the coronavirus pandemic, but on Monday they confirmed that it’s officially back on. Many member deals are already on display — just log in to your Amazon account to view them. Also, if there was a part of you that had been feeling guilty about your reliance on Amazon in the face of the pandemic, this year the retail giant has a promotion going to benefit small businesses — From now through October 12, Prime members who spend $10 on items sold by select small businesses will get a $10 credit to use on Prime Day that’s good for almost any product on the site. Find all the details at Amazon.com/supportsmall.
Use Your Judgement
Finally, I had to smile at this story pointing out the growing legions of companies — and sometimes individual bosses — who are letting their teams off the Zoom hook. I was on a Zoom last week with a client for which I felt obligated to turn on my camera and was delighted when my client chose not to turn on hers. She, knowing this was her meeting, was essentially signaling that a phone call was just fine. I actually think that may be a helpful barometer to keep in mind going forward. If you’re the leader and simply dial up the audio, you’re essentially allowing everyone else to do the same. That immediately releases the pressure. As for the rest of those tougher-to-read instances? As my parents used to (frustratingly) say: Use your judgment.
MORE FROM HERMONEY: Phoning it in when Zoom just isn’t necessary
Have a great week,