139th News

Coping with Financial Issues of COVID-19 - Part 16

  • Published
  • By Randy Gerard, Personal Financial Counselor

New Items:
I hope you all are staying healthy and safe. There is a lot of news regarding your Thrift Savings Plan so hope you find these Tidbits interesting-


I. Avoiding a “Post Pandemic Splurge” – It appears we are still on a COVID rollercoaster and as many are saying now, the “new normal” may be significantly different from what we’ve had before. Financially there might be some of you that have really been able to hunker down and save some serious money from staying at home more, not commuting/driving so much, etc. If that’s the case, first of all, congratulations! However, even Dave Ramsey feels moved to warn folks in this environment to be very careful and not get caught up in a “splurge”. In a recent newsletter of his, he makes several good points that I’m going to share.

 Follow Your Budget – If you find yourself tempted with a big sale (there seems to be dozens advertised every day by email alone!), use the line item in your budget for “fun”, “entertainment”, etc. and treat yourself within reason. Just remember, things will eventually get to that “new normal” and over-indulging now will cost you down the road.
 Make a List - You’ve done without for several months now, and the “want to do or buy” list is pretty healthy I bet. Take a step back, benefit from the delayed gratification that was forced on you during quarantine and prioritize the items on your list. You can’t support all of the local businesses so follow your budget above and consciously decide what’s possible and reasonable.
 Maintain your Emergency Fund – With the federal stimulus bump and hopefully your own savings you might have a good chunk of change in your reserves. OK, granted it’s pretty “lazy” money but before you start spending chunks of it remember how long it took to build up and how great the feeling you have that’s it there to fall back on if things turn for the worst or are really prolonged.

II. Federal Student Aid Changes – The U.S. Department of Education announced last month that they have contracted with 5 companies to enhance customer support and contractor accountability. The contractors supporting the more than 68 million student loan customers will be:

 Edfinancial Services, LLC
 Missouri Higher Education Loan Authority (MOHELA)
 F.H. Cann & Associates LLC
 MAXIMUS Federal Services Inc.
 Texas Guaranteed Student Loan Corporation (Trellis Company)

To address current inconsistencies and lack of accountability, the contracts contain 41 objective, measureable service-level metrics delivered through direct engagement contact centers and the usual electronic means. In a further step to improve the student loan experience, FSA will embark on comprehensive training for the agents and will be moving to a centralized loan processing platform that not only will provide consistency across the vendors but also allow comprehensive counseling for borrowers. The overhaul will start first with non-servicing work to allow vendor familiarity with the new platform and then move to service-related activities. For those of you managing a student loan portfolio, this should come as a pleasant improvement.

III. FIRE – This is actually an acronym that stands for Financial Independence Retire Early. There are many ways to invest in the stock market, from portfolios of individual securities and even options to pooled investments such as mutual funds, index funds or target date funds like those available in your TSP. The main approach of this investment movement (usually focusing on younger investors just starting out but really could apply to anyone more than 5 years from retirement) is to 1) Spend mindfully, 2) Save early and often and 3) Broadly diversify your investments. This is a very sound approach and if you’d like to learn more, check out the FIRE advocates on websites like Mr. Money Mustache, Our Next Life and Can I Retire Yet. Take a look and let me know what you think, I’d be interested in your thoughts.

Don’t hesitate to reach out by phone, email or ask for a private Zoom session for you or your family members. Be Vigilant and STAY SAFE!
Randy Gerard, PFC C (573) 415-6934 O (816) 236-3659 pfc.rosecrans.ang@zeiders.com