Financial Triage Amid COVID-19


Lucas Casarez
Financial Planner

Over just a 5-week period, unemployment claims have surged to 26.5 million workers. And I wish we could say there is an end in sight. Already some of my clients have advised me that they have been let go. As I do my best to be there for them in these unprecedented times, this is what we talk about:

Unemployment Insurance

The federal government quickly passed the CARES Act to provide a boost to unemployment benefits to the tune of an additional $600/week and waived the 1-week waiting period. Your benefit (which usually doesn’t cover 100% normal pay) is based on your reported income. But with the new $600/week additional benefit, lower-income earners could possibly earn more than their regular income. While as currently unemployment benefits are capped at $1,161/week (CO $561 + FED $600) high income earners will likely experience an income gap.

Due to a surge of applicants, Unemployment Insurance is behind in processing claims, but once your claim is approved, you will receive your payments retroactively. Please note that Unemployment Benefits are taxable at both the state and federal level but you will not pay Social Security or Medicare taxes on this income.


In times of uncertainty, it’s best to focus on things you can control. For many Americans a portion of their expenditures are discretionary and non-essential. And while it’s not always easy to reduce lifestyle expenses to which you’ve grown accustomed, consider challenging yourself to reduce at least some unnecessary expenses and watch your financial outlook improve — even in times like this.

If you become unemployed, remember that you may not need to replace 100% of your gross income. And if you elect to reduce some of your discretionary spending, you’ve already improved your situation. Typically, retirement savings and short-term savings goals can be placed on hold until you secure new employment.


If your household income minus your expenses is a negative number, you may have to begin liquidating accumulated resources and assets. This is exactly what emergency savings are for. Beyond your savings, consider the impact of withdrawing from investments including retirement accounts or going into credit card debt.

Early withdrawals from retirement accounts often incur a 10% penalty, but there was a special provision that waives the penalty in 2020 as part of the CARES Act. But while the penalty is waived, your retirement account withdrawals may be subject to income taxes.

How Long Will Your Resources Last

If you are running a monthly deficit, you can take the value of your resources and divide them by your monthly deficit to determine how much leeway you have.

Trouble Making Payments

If the numbers don’t add up and you are unable to make all your monthly payments and still buy food and other necessities, be proactive. Reach out to companies to work through payment options that might include skipping a payment or modifying your agreement so that you can pay less each month over a longer period of time. These are unusual times in which, hopefully, companies will do their best to work with you. Track your request and their response as you may need to access this information at a later date.

If you’re currently gainfully employed, reviewing all of the above steps and taking action now will prepare you to navigate a future recession. And if you never become unemployed, you will still be better off fine-tuning your finances.

Lucas Casarez is a husband, father of two amazing kids, and a Certified Financial Planner™. He founded Level Up Financial Planning, which is one of the few fee-only financial planners in Northern Colorado. The mission of Level Up Financial Planning is to guide his clients in taking their financial confidence to the next level. Have a personal finance question you would like me to answer in a future week? E-mail [email protected]

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