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HerMoney Podcast Bonus Mailbag #20: Surviving And Thriving During Coronavirus  

Kathryn Tuggle  |  April 18, 2020

We tackle listener questions all about what you and your loved ones are facing due to the recent economic slowdown and market turmoil.

Those feelings that you’re feeling — anxiety, worry, grief for lost loved ones or postponed retirement plans, stress — all of them are completely normal. We all deserve to take a moment and acknowledge that it’s okay to not be okay for a little while. It’s okay to wish that life looked a little more like it used to just a few short weeks ago. 

Over the last few weeks, we’ve had so many questions coming in from listeners all over the country that we decided to put together a special episode and dive in to address some of your concerns. We are here for you during these times, just like we are during the good times, and we’re so thankful to you for tuning into our podcast. If you or a loved one are struggling to make it through, HerMoney has a complete list of coronavirus resources, including a breakdown of 401(k) FAQ, details on the stimulus checks and who qualifies, a look at how to file for unemployment, and who’s hiring now.

In this episode, Jean and Kathryn tackle a question from a listener who is an independent contractor and is unsure whether or not to file for unemployment. She’s also curious if 401(k) plans can be pulled from without penalty at this time. We also dive into two home loan refinancing questions — one from a listener who has a fixed interest rate of 4.125% and 20 years left on the loan, and one from a listener who is worried that refinancing may not be safe during these uncertain economic times. 

Then, we take a question from a listener who is considering converting everything in his portfolio to cash in order to help stave off any further losses in the market, and we hear from a listener who was just laid off from her part-time job at a gym and is unsure whether or not she’ll qualify for unemployment. Lastly, we dive into a debate on whether money that’s coming in right now would be best put into an emergency fund, or used to pay down credit card debt. 

This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416

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The HerMoney podcast is supported by      Edelman
All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416


Jean Chatzky: (00:01)
HerMoney is brought to you by Fidelity Investments. Fidelity is committed to helping clients through any market conditions with financial planning and advice when you need it most. Learn more at HerMoney comes to you through PRX. Hey everybody, it’s Jean Chatzky. Thanks so much for being with us today during what is a very unusual and unprecedented April. Those feelings that you’re feeling, the anxiety, worry, the grief, it’s all completely normal. So is the massive amount of stress that we’re all under. And I think that we all deserve to just take a sec and acknowledge it’s okay to not be okay for a little while. It’s okay to wish that life looked a little bit more like it did a few short weeks ago. And as we all look for some silver linings in the tragedy, we may actually start to feel a growing appreciation for our normal lives and find ourselves feeling nostalgic for something as simple as our morning commutes. I mean truly we have heard from so many of you over the years that we are your companion on your morning or evening ride or drive and with your daily routines upended, you may be now tuned into us from your kitchen or while sitting on your front porch or hiding in your bathroom for a moment of much needed and well-deserved solitude. The point is wherever you are, we are really glad you’re here. Kathryn and I decided we would pull together a special mailbag just to deal with the questions that you’re asking right now. We are coming to you from our homes. I am in Westchester County, New York. I’m actually holed up in my daughter’s bedroom. That was the quietest place that I could find today. And Kathryn, where are you?

Kathryn Tuggle: (02:12)
I’m in my living room and you may be able to hear my radiator squeaking and hissing and popping because it’s quite cold here in New York still, even though it’s April, so my radiators are seeing their city symphony.


Jean Chatzky: (02:27)
Yeah, and actually, if you hear anything from my end, it’s really whipping up outside. There was a lot of rain and a lot of wind earlier. I heard the weather forecaster mentioned the word tornado earlier. I was thinking, great, that’s just what we need on top of everything else today. But I don’t think we’re getting one. I think we are just getting a lot of rain and a lot of wind.

Kathryn Tuggle: (02:50)
Good, good. Let’s hope it stays that way.

Jean Chatzky: (02:52)
Yeah. So you pulled these letters out of our mailbag. Have we been seeing a bigger flurry than usual?

Kathryn Tuggle: (02:58)
We have, we have. And part of that is just increased correspondence from our Facebook group, which now has 12,000 women in it, all of whom are listening to our podcast and looking for advice for themselves and for their families. So, this was a combination of an influx of questions we had coming into our mailbag as well as questions from our very vibrant Facebook group.

Jean Chatzky: (03:22)
You know, I think anybody who’s listening who hasn’t checked out the Facebook group, absolutely should. I love this community. I mean they are just fun and funny and smart, full of great advice and suggestions and so judgment-free. It’s a really lovely group of women from all across the world.

Kathryn Tuggle: (03:44)
Completely agree. I love it. I love the interactions. I have loved getting to know some people on a first name basis, so we would love to have anybody who’s out there listening now join us.

Jean Chatzky: (03:55)
Absolutely. All right. What do we have up first?

Kathryn Tuggle: (03:58)
Our first, and it comes to us from CeeCee and Castle Rock, Colorado. She writes, I’m an independent contractor for a small business and I’m 42 years old. I’ve not been working since March 13th when they locked down all longterm care facilities and I’ve not been paid since. It’s my understanding that I do not qualify for unemployment as an independent contractor. Is there any sort of assistance out there for people in my scenario? I’ve also read that 401k plans can be pulled from without penalty at this time. Is that true? Would love your feedback. Thanks so much.

Jean Chatzky: (04:31)
So CeeCee, I would absolutely file for unemployment because the CARES Act opened up unemployment for people who typically would not qualify. So independent contractors, people who usually get 1099s, freelancers, self-employed, solo practitioners, you can all file for unemployment. And your benefit amounts, they’re going to be calculated based on your previous income using a formula from the disaster unemployment assistance program. Typically, I know these workers are excluded, but this time you’re not, and the benefits are substantial. You’ll get state benefits for up to 39 weeks plus another $600 a week, although that comes from the federal government. And that only lasts until the end of July. So I want to make sure you get on this quickly so that you get as much of that additional $600 as possible. And I think that that is a big misconception, you from people who just haven’t dug into the inner workings of the very, very complicated CARES Act. But the money is there, the money is there for you. So please go ahead and apply. And if you get denied, then you want to appeal because you are eligible.

Kathryn Tuggle: (05:59)
It’s such a good point. The traditional rules of unemployment do not apply anymore. So even if you’ve gone through this process before, the rules are completely different now.

Jean Chatzky: (06:08)
Yeah, yeah, absolutely. So go get ’em.

Kathryn Tuggle: (06:11)
Our next note is from Ellen in Long Island, New York. She writes hi Jean and Kathryn, I’m wondering if I should refinance my home loan. Here’s all my information. I have a fixed rate loan with an interest rate of 4.125%. The loan origination date is December of 2010 and the payoff date is scheduled for January, 2041. The original loan amount was 344,000 and I owe 278,700. I have no escrow balance. I put 20% down when I bought my house, so I pay my taxes separately. When we can, we’ve been trying to pay an additional payment each year and my husband and I both have excellent credit. I love your podcast and want to thank you so much for doing it. I’m the daughter of a financial advisor and my father taught me from a very young age about money. I’m working on instilling the same values in my two teenage daughters. Stay healthy.

Jean Chatzky: (07:01)
Hey Ellen. Thank you so much for writing. In general, I think you probably have a really good opportunity to refinance your mortgage at this point. I went to I plugged in the numbers. You could basically, if you’ve got very good credit, shave a full percentage point off of your interest rate. You could go from having an interest rate of 4.125% to about three, 3.2% depending on what you’re able to qualify for and what you’re able to find and where mortgage rates sit the day that you shop. That would take your mortgage payment as I compute it from the almost $1,700 a month it is now, to a little over $1,200 based on the new loan amount, and would save you about $465 a month, about $5,000 a year. That would enable you to make three extra mortgage payments a year, four extra mortgage payments a year if you wanted to get out of the loan sooner. You may want to think about going to a 15 year mortgage or a 20 year mortgage which would lower your interest rate even further and enable you to save even more in interest because you’re trying to prepay this loan. I’d just think carefully about whether you have other uses for the money where you can earn more money on your investments so to speak. If you are not making all the contributions that you could to your retirement accounts to grab matching dollars, or if you have any other debt. But I would go ahead. I would go ahead and shop and I would feel great about the fact that your credit is in such good shape. That gives you an opportunity to do this at this point.

Kathryn Tuggle: (09:00)
Questions like this make me so excited when I see how much money people can save.

Jean Chatzky: (09:05)
I know I dig into these calculators. I feel like such a geek but I love it too. I was like, oh my God, that’s $465 a month and you know, the only thing you have to be aware of here is, so right now, they are due to get out of this loan in January of 2041 which is about 20 years from now. What you don’t want to do, what will cost you more in interest, even if you’re paying less monthly is extending back to a 30 year term. So either just keep prepaying, if you want to give yourself the flexibility to do it on your schedule or go into a shorter term loan.

Kathryn Tuggle: (09:45)
Go for it.

Jean Chatzky: (09:46)
Yup, absolutely. I know we’ve got more letters to get to, but let me just take a moment to remind everyone that HerMoney is supported by Fidelity Investments. For more than 70 years, investors have relied on Fidelity Investments to help plan for their financial futures. And as always, when the unexpected happens, Fidelity’s there to help you work through it with financial planning and advice for what you need today and tomorrow, helping to make it all clear. To see how Fidelity can help you and your family on the path forward. Visit We are back with our mailbag special where Kathryn Tuggle and I are taking all your questions pertaining to the economic slowdown and the market turmoil that we’ve seen due to coronavirus. Kathryn, what’s next?

Kathryn Tuggle: (10:33)
Our next question is from Haywan. She writes hi Jean and Kathryn. My husband and I currently own a townhome in northern Virginia, not too far from Washington DC. With the interest rates being at an all time low, my husband and I are discussing whether we would be good candidates for refinancing. My husband works for the government and his job is for the most part stable. We have two toddlers with another one on the way this summer and we’ll have three kids under three shortly. We’re planning on staying in our townhome for the next three years. We bought it in 2015 and possibly longer. Are there any risks to refinancing your mortgage during these uncertain times?

Jean Chatzky: (11:07)
I think the only risk, and I alluded to it in the answer to the last question, is that sometimes people don’t take into consideration the fact that there is a cost to this transaction and you want to make sure, especially because you’ve got a relatively short timeframe here with three years, that you are going to make your money back. So it’s really a matter of just doing some simple math. When you go out and you apply for a mortgage, you’ll get a list of the costs of the transaction. You’ll also be able to figure out, based on the new interest rate and new payment compared with your old interest rate and old payment, what the difference is. You take the cost of the transaction, you divide it by the monthly savings and if you get a number that shows you that you will make your money back in fewer than 36 months, in your case, then you go for it. And if you are not going to make your money back that quickly, then you just don’t. For what it’s worth, I don’t expect interest rates to go up anytime soon. And for that reason because mortgage rates are tied to them, they should stay relatively low as well, so this is not a window that I expect to close on you anytime soon. And if you want to take a little bit of time and think about whether you really will be in this house for the longterm or whether you’d like to move sooner based on what’s going on in the real estate market, you have the time to do that.

Kathryn Tuggle: (12:48)
Such a good point about considering the cost. It’s just like opening up that 0% credit card. Right?

Jean Chatzky: (12:54)
Exactly, exactly. You got to make it, there’s a cost, right? There’s a cost to the transaction. You’ve got to make your money back.

Kathryn Tuggle: (13:01)
Yeah. It’s just like doing a balance transfer. That’s what I was trying to say.

Jean Chatzky: (13:05)
Yeah, no, I knew it.

Kathryn Tuggle: (13:08)
Our next question is from a couple, from Steve and Eileen. They write, as of today, our investments in stocks and bonds are down about 18%. Not bad given that some stocks are down much more sharply. My idea was to convert everything to cash in a tax protected manner to preserve what we have now in anticipation that the market is going to go much lower over the next few months. Then once we feel it is bottomed by back in at that time with the cash we’ve preserved. Haven’t we then added value to our losses and ultimately come out ahead? Can you comment on this particular strategy? I haven’t seen anyone address this specific type of plan. Thank you so much.

Jean Chatzky: (13:46)
So it sounds to me like market timing or trying to time the market and I’d be very curious to know where the market’s sat when this email was written. Stocks hit what we’re not sure is a permanent bottom, but was a low in the 18 to 19,000 point range on the Dow toward the end of March. Now as you and I talk Kathryn, in mid-April, they are back up three, 4,000 points. And they are volatile. There is no question that they are volatile. They are going up and down hundreds of points, sometimes thousands of points in a single day. But I think that that example illustrates why this is such a difficult thing to do. You have to not only know when to get out, you have to know when to get back in, and I don’t think I could do that. We actually cited a study from Fidelity in an episode a couple of episodes back, and it illustrates why this is so tough. Basically, it showed that in 2008 the investors who elected to pull out of stocks but eventually got back into the market, they had average account balances of 89,000 when they made their transaction. When you fast forward to the fourth quarter of 2019 those investors had average account balances of $276,000. So the people who tried to time things had average account balances of $276,000. You compare that to those investors who stayed the course. In 2008 their average account balances were actually lower, but by the fourth quarter of 2019 their money had grown to $360,000. So the people who didn’t try to time the markets had $80,000 more. I just think that’s important to keep in mind.

Kathryn Tuggle: (15:57)
It is pretty shocking, right? Because when you see the market tanking, you want to get out. You want to try and preserve what you can. But these numbers clearly show that staying the course and not taking your money out is the way to go.

Jean Chatzky: (16:10)
And it’s not easy. I mean, I read story after story from investors who I respect, who are tried and true, you know, buy and hold type investors. Jim Stewart of the New York Times for one, but others too who said, you know, I have been doing it this way for decades and this scenario broke me. And I get it right? I mean I was on the phone to my financial advisor multiple times because it felt so scary. It made me so anxious that, you know, in the end after talking about it with Elliot, we didn’t do anything. You know, we are in it for the long term. We have long term time horizons. We are appropriately allocated for people who think that they might want to retire when we think we might want to retire. So we stayed the course.

Kathryn Tuggle: (17:14)
And you’re happy about that.

Jean Chatzky: (17:16)
I don’t know, ask me on a day when the market goes up and I’m happy about that and asked me on the day when the market is tanking and I am not happy about that. But I know that I am just as emotional about my money as anybody else. I just because of what we do every day, I have the perspective of understanding that I am really emotional about my money and that I shouldn’t let my emotions drive me into action.

Kathryn Tuggle: (17:44)
Yeah. Well, maybe by the time we’re actually talking in person, you’ll be happy.

Jean Chatzky: (17:50)
Maybe. Maybe. You know. If it’s Wednesday I’ll be happy.

Kathryn Tuggle: (17:55)
All right. Our last question is coming to us from Tracy. She writes hi Jean and Kathryn. I live in Colorado with my husband and three teens. My elderly parents also live with us due to financial reasons. I was laid off from my part time job last week due to my company being shut down due to Covid-19. I work at a gym. I was told that I’ll be able to come back when things go back to normal. Luckily my husband’s company sent them all home to work remotely during this time and so far we don’t think he will lose his job. We can live on my husband’s income alone, but now we’re worried because we only have about $2,000 in our emergency fund. We have a credit card that we use for all of our normal monthly expenses. And then we always pay it off in full at the end of the month. The amount we’ll owe by the end of April is $5,400. We were wondering if we should only pay the minimum for now and put that $5,000 towards our emergency fund in case something should happen to my husband’s job. Our thinking is that when life goes back to normal, we could just pay off the credit card debt. We just hate doing that because then we’d have debt and we hate paying interest. To paint a more complete picture of our financial life. We contribute 6% of my husband’s annual salary to his 401k, which is matched at 6% and we’re both around 50 years old. Thank you so much for your help.

Jean Chatzky: (19:10)
So a couple of things. And I know these are times that we have never experienced before. And one of the reasons I know that is because I’m going to give you some advice that I would not give in normal times. But first I just want to tell you that you should file for unemployment because people who work part time are eligible for unemployment under the CARES Act. So I want you to get that going immediately. The other thing that I’m about to say is don’t pay off that credit card bill. I don’t think that a $2,000 emergency fund with one worker is sufficient right about now. I hate paying interest as much as you hate paying interest, but I would just hold onto that money. Try not to spend it. Try to just keep it in a place where when things go back to normal, you can throw it against that credit card bill and get rid of the interest. But for right now, this feels better to me.

Kathryn Tuggle: (20:05)
Yeah, you’re right. For one earner, only $2,000 is not enough given that there are so many question marks now, right? About where we’re headed.

Jean Chatzky: (20:15)
Yeah, absolutely. And I think if you pay interest for a couple of months, it’s not going to break you, but there may be other things that need to be paid for in cash that potentially could. So I just want you holding onto the cash for a little while. You may find that once you start receiving unemployment, things are easier and you feel like you’ve got enough in reserves to go back and pay that bill and you can always make a partial payment. So don’t stress about this right now. Don’t stress about the fact that you’ve got a little bit of debt, it’ll keep your spending down as you go into the next few months just automatically. Cause you’re going to be thinking about the fact that you have this credit card bill so you’re automatically not going to want to spend as much money. That’ll be a good thing. And when things get back to normal, based on your past patterns, you will pick up the idea of paying off the credit card in full once again. I had a nice conversation with Charles Duhigg who we had on the show. You can check out a story based on that conversation on but he’s the habits expert. He wrote the book The Power of Habit and he basically said, during these times we may not be able to keep up with all of our old habits, but when things get back to normal, we will get back to those old patterns, so don’t worry about that.

Kathryn Tuggle: (21:39)
Great perspective.

Jean Chatzky: (21:41)
Yeah, I love him. I was very, very happy to hear that perspective and I’m glad that we took the time and had the time to answer these questions. Thanks so much for pulling them together.

Kathryn Tuggle: (21:50)
Me too. Absolutely.

Jean Chatzky: (21:52)
Thank you all as well for listening to me and to Kathryn today on HerMoney. Thanks to all the listeners who submitted questions over the last few weeks. We’re going to keep taking the up to the minute ones and keep turning around these episodes quickly so that you get the answers that you need. So please keep writing us at If you like what you hear, we do hope that you’ll subscribe to our show at Apple Podcast. Leave us a review because we love hearing what you think. We also want to thank our sponsor Fidelity. If the show sounds a little different, it’s because ordinarily you record out of CBM Sound Studios, but today we are using zoom and a Yeti mic from the comfort of our homes. Our music is provided by Video Helper and our show comes to you through PRX. Thanks for joining us. We will talk soon.

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