Money Management

It’s easy to forget how similar our lives are to others around the world. 

While some Americans doubted the wisdom of providing eligible citizens with stimulus funds, the U.S. was not alone in doing so. In fact, of the 195 recognized countries on Earth, 186 provided their citizens with much-needed financial assistance during the COVID-19 pandemic. While no country got it 100% right, leaders came at the problem from every direction. Some countries aimed cash assistance only at the poorest residents, while others tried to reach almost everyone.

Countries like Belgium and Gabon focused on a tiny percentage of their populations, while India and Japan rolled out massive initiatives. In all, an estimated 1.36 billion people received cash-based relief.

As Americans waited for stimulus payments to hit their bank accounts, they may have been unaware of the unprecedented transfer of cash going on worldwide. It was the first time that workers received cash support with no strings attached on such a large scale.

Not every country was on board with direct cash payments

With no data available for North Korea or Western Sahara, here are the seven countries that provided no cash relief to their residents.

1. Chad

According to the World Food Programme (WFP), Chad was desperately poor before the pandemic, with nearly 50% of its population living in poverty. In fact, 37.8% of children in this African country are stunted due to a lack of nutrition.

While outside funds poured into Chad from groups like The World Bank and International Monetary Fund (IMF), it was not shared as direct payments with the Chadian people. It’s possible that the government of Chad — one of the poorest countries in the world — lacked the infrastructure to distribute money.

2. Greenland

One could argue that Greenland was far less impacted by COVID-19 than most other countries. Due, in part, to its isolated location, there were only 21 COVID-19-related deaths from Jan. 3, 2020, to March 21, 2023. With strict measures in place to ensure new cases of the virus did not enter the country, it’s possible the government never saw a need for cash relief.

3. Hungary

Hungarians live under the dictatorship of Prime Minister Viktor Orban, and received little aid from their government as COVID-19 swept the country. As part of the European Union (EU), Hungary received a portion of the EU’s pandemic recovery fund but almost immediately proposed spending the money on energy issues.

It appears the only meaningful assistance for residents came in the way of tax breaks and a cap on interest rates.

4. Libya

The United Nations Children’s Fund (UNICEF) and other outside agencies poured money into Libya in hopes that it would reach the most vulnerable by increasing exposure to health information and providing vaccines. The Libyan government provided no direct cash assistance.

5. Nicaragua

It’s unclear if Nicaraguans were assisted in any way by their government. According to NPR, getting accurate news out of Nicaragua or its longtime authoritarian president Daniel Ortega can be next to impossible.

6. Oman

The Arabian Peninsula country of Oman did not offer cash assistance but did provide tax breaks and other initiatives.

7. Papua New Guinea

Papua New Guinea’s Prime Minister directed funds to 89 members of parliament (MPs). Those MPs were told to spend the money on healthcare in their districts. According to a report in The Interpreter, there’s no way to know how much of the money — if any — was spent on health. It’s more likely that money went to supporters of the MPs rather than their constituents.

As the U.S. suffered through the pandemic, it was easy to forget that billions of other people experienced the same thing. They suffered job and income losses just like us. They listened to their neighbors argue over mask mandates and worried about their elderly or frail loved ones. At the end of the day, the pandemic serves as a reminder that we’re more alike than we might imagine.

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Things may not implode completely, but that doesn’t mean the situation is good. 

In 2022, as inflation surged and the Federal Reserve attempted to address it via seven different interest rate hikes, many financial experts were quick to warn consumers to gear up for a recession in 2023. The logic was that the Fed’s interest rate policies were driving up the cost of borrowing, and that was expected to lead to a major pullback in consumer spending.

But that hasn’t happened thus far to such an extreme. Not only that, but the national unemployment rate is low, jobs are abundant, and recent GDP (gross domestic product) figures indicate that the economy is growing.

Still, there are already pockets of trouble within the broad economy. Home sales ticked upward in February, but that may be a byproduct of a temporary drop in mortgage rates. Prior to then, sales were on a steady decline.

Meanwhile, the banking sector is having a meltdown, prompting consumers to wonder whether their savings account balances are really safe. And the tech sector has been actively laying off staff left and right.

It’s these circumstances that are leading to what some economists call a rolling recession. And that’s something that could be with us for all of 2023.

Some sectors are feeling the pain

When a typical recession hits, the broad economy tends to feel it. With a rolling recession, sectors tend to take a hit one by one, and independently of the broad economy.

But a rolling recession is hardly a picnic — especially for those impacted by it. Layoffs, for example, aren’t abundant these days, which is helping to keep the national jobless rate nice and low. But many tech sector employees may be losing sleep over the idea of getting the ax. And some may be forced to put off big financial decisions, like buying a home, until things settle down.

How to cope with a rolling recession

The advice for coping with a regular recession is similar to a rolling recession. First, know your weak points. If you work in an industry that’s been hit hard this year, boost your savings. If you have enough money in the bank right now to cover three months of essential living expenses, aim for four or five months’ worth of expenses.

Also, boost your job skills. Being great at what you do won’t guarantee that you won’t be laid off, but it might lessen your chances.

Meanwhile, if you’ve been on the fence about selling your home, consider acting sooner rather than later. The housing market has been cooling, and February’s uptick in home sales is the first month in the past 12 where there’s been an increase instead of a decline. It’s pretty clear that higher mortgage rates are here to stay for a while, so it could pay to list your home before they rise even more and push additional buyers out of the market.

In some ways, a rolling recession can be trickier to navigate than a full-blown recession. But since we may be in for months of upheaval across different sectors, be mindful of what’s going on and do your best to prepare and protect yourself. Doing so could make 2023 a much easier year to cope with.

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Your five-minute guide to the ways your money and investments are protected against institution failure. 

Luckily, bank and brokerage failures don’t happen very often. But when they do, they can have a huge destabilizing impact on the wider economy. As we’ve seen with Silicon Valley Bank, not only do bank collapses affect customers and investors, but panic can also spread quickly to other institutions.

The good news is that there are a number of measures in place to protect your savings and investments. Key amongst them are FDIC and SIPC insurance, which cover your money in the event of bank or brokerage failure.

The differences between FDIC and SIPC insurance

The main difference between FDIC and SIPC insurance is that one covers deposits in a bank and the other covers assets with a brokerage firm. Understanding what each one does can help you ensure your money is insured and enables you to take extra steps if necessary.

Here is a summary of FDIC insurance versus SIPC insurance:

Know your limits

There’s a limit to what — and how much — FDIC and SIPC insurance will cover. This has become a hot topic recently, because a large proportion of Silicon Valley Bank’s deposits were not insured. While SVB did have an unusually high proportion of uninsured deposits, it is not alone. According to S&P Global, at the end of 2022, over 45% of total U.S. bank deposits fell outside of FDIC coverage limits. Some lawmakers are pushing for changes to the system so that all deposits are insured. That may or may not happen. In the meantime, there are steps you can take to protect your money.

FDIC insurance limits

FDIC insurance covers up to $250,000 per depositor, per bank, per ownership category. Ownership categories are different from bank account products such as a saving or checking account. They are better understood as the way you hold your funds. For example, a single account falls into a different ownership category from a joint account. If you have a retirement account that’s covered by the FDIC, that is another category.

To give you an idea of how that might work in real life, let’s say Mary and Margaret have various accounts with the same bank. They put $400,000 into a joint account. Mary has $100,000 in a savings account and $200,000 in certificates of deposits (CDs). Margaret has $200,000 in a CD and $100,000 in an FDIC-insured individual retirement account (IRA).

Here’s how that breaks down into ownership types and coverage:

Margaret has more money with the bank, but because it is split across different ownership categories, all her funds are insured. Mary’s savings account and certificates of deposits all come under the umbrella of a single account, and exceed the $250,000 limit. Some of her money would not be protected by the FDIC if the bank failed.

SIPC insurance limits

If your brokerage firm fails, SIPC insurance covers up to $500,000 of assets. This includes any securities you hold and as much as $250,000 in cash. As with FDIC insurance, if accounts are held in different capacities, they qualify for separate insurance. For example, if you hold equities as an individual and also have a joint account as a couple, each one would be covered for up to $500,000.

Broadly speaking, the protection applies to various equities and investments that qualify as securities. These include:

StocksBondsTreasury securitiesMutual fundsMoney market mutual fundsReal estate investment trusts (REITs) that are registered with the SEC

The SIPC only gets involved when regulators refer the case to them. If this happens, it can either transfer customer accounts to another firm or liquidate assets. Be aware that you’re covered for the number of shares you hold, not the cash value of those shares. So if the share price dips during the liquidation process, your losses would not be covered.

SIPC insurance doesn’t protect you against losses from investments that don’t perform as you’d hoped. If you own shares in a company that goes bankrupt, the SIPC would not pay out. There are also a number of other assets you might buy at a brokerage that are not covered. These include:

Futures contractsForeign exchangeCryptocurrencyUnregistered investment contractsGold and silver

How to make sure your money is safe

It’s terrifying to think that the savings and investments you’ve worked hard to build could get wiped out by a financial crisis. However, not only are there a number of protections in place to stop this from happening, there are also steps you can take.

1. Check whether your funds are protected

If for some reason your bank or investment account is not FDIC or SIPC-insured, you might want to consider moving your money elsewhere. Here’s how to check your account is covered:

FDIC insurance: Most banks are FDIC insured, but you can double check by looking on your bank’s website. You can also use the FDIC’s bank finder tool or call them at 1-877-275-3342.SIPC insurance: Check out the terms and conditions on your brokerage account. You can also check out the list of members on the SIPC website, or call them at 202-371-8300.

2. What to do if you have more than $250,000 in bank deposits

If you have more than $250,000 with one bank, use the FDIC calculator to find out what’s covered. As we discussed above, if your money is in different ownership categories, you could be insured for double or even triple the $250,000 threshold. If it’s not, consider the following options to insure more of your bank deposits:

Open an account with another bank or credit unionOpen a joint account or another account with a different ownership categoryConsider moving money into a brokerage account

3. What to do if have more than $500,000 in securities

If you have more than $500,000 in investments, don’t panic. A number of top brokerages also have excess SIPC insurance and protect higher amounts. Check with your broker to see whether this is the case, and how much is covered.

It’s also reassuring to know that brokerages are required to keep customer assets segregated. In theory, this means that your investments won’t be mixed in with those of the brokerage and you’ll be able to get them back if the firm fails — potentially without SIPC intervention. According to FINRA’s website, “In virtually all cases, when a brokerage firm ceases to operate, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm.”

All the same, part of the reason we take out insurance is because the unexpected sometimes happens. If you hold more than the $500,000 threshold with a firm that does not have excess insurance, you might consider opening another brokerage account with a different firm to get additional protection. As with the FDIC coverage, you’d also qualify for more SIPC insurance if you set up another account with the same institution under a different category, such as a joint account.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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There are options you can explore so rent doesn’t bust your budget. 

There’s a reason so many people have been struggling to buy a home these days. Not only are mortgage rates elevated, but home prices are up, too.

But it’s not just home buyers who are having a difficult time finding a place to live. The cost of rent is up, and it’s putting many people in a tough spot.

In February, shelter costs were up 8.1% on an annual basis, according to that month’s Consumer Price Index Summary. And given that inflation is making everything from food to utilities to transportation cost more, you may not be able to afford to pay a premium for a rental.

The good news, though, is that with a little strategy, you can find ways to save on rent. Here are a few to look at if the cost of housing in your area is beyond your budget.

1. Get a smaller space

Studio apartments seem to have a bad reputation, but in reality, living in one isn’t so bad if you’re solo. And not all studios have you in a situation where your bed is pressed up against your fridge. Some studios have a kitchen off to the side or in an alcove.

It pays to look at studios or smaller units if money is tight and the cost of rent seems astronomical to you. You don’t have to live in a cramped space forever — just until your financial options open up.

2. Give up some perks

You might prefer to rent a home that comes with upgraded appliances and other nice features. But if giving some of those up allows you to save hundreds of dollars a month on rent, then it may be worth making some sacrifices.

Similarly, if you’re renting in an apartment building, you might prefer having access to an elevator so you don’t have to haul your groceries up three flights of stairs. But moving to a walk-up could shave a lot of money off of your rent, so it may be worth it to forgo the elevator for a year. (And besides, all of that stair-climbing is apt to get you into great shape.)

3. Be willing to live in a less-convenient part of town

Your preference may be to rent a home that puts you close to things like restaurants, coffee shops, and public transportation. But if moving further away from these amenities makes your rent cheaper, then that’s something to think about.

That said, one thing you don’t want to do in the course of saving money on rent is compromise on safety. Moving to a corner of town where crime rates are higher isn’t necessarily your best choice, because the last thing you want is to feel anxious every time you end up working late or coming home after dark.

It’s unfortunate that shelter costs are up so much. But at a time when the price of everything is up, that makes sense. If you’re willing to make some compromises on the rental front, you might manage to keep your costs down. And that way, you can work on shoring up your savings account balance so you’re able to move to a more desirable rental in time.

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Your credit card issuer likely offers free tools that help you stay on track with your payments. 

Late credit card bill payments can impact your wallet and credit. You’ll likely be charged a late fee when you miss or make a late payment. If you continue to put off paying your credit card bill, it could result in a negative mark on your credit report — which could lower your credit score. When you have a lot going on in your life, it can be easy to forget. But you can stay on track with your credit card payments using free resources from your credit card issuer.

These free tools can help you stay on track

You may be missing out on helpful credit card account features that can make your life easier. Most of the best credit cards have useful account management tools that are free to use. The following features may help you stay on track with your credit card payments.

Payment reminder alerts

If you struggle to remember to pay your credit card bill on time, you may want to enable payment reminder alerts. You can do this through your credit card issuer’s website or mobile app. Then you’ll receive payment reminders by email before your credit card’s due date. This reminder could make it easier to stay on track with your payments.

Automatic payments

You can also set up automatic payments through your credit card issuer. When you do this, you’ll agree to have your bill automatically paid on your behalf on or by a set date each month. You’ll likely be given the option to pay the entire account balance or the minimum amount due. It’s best to pay the entire balance to avoid credit card interest charges. If you go this route, make sure you have enough money in your checking account to cover your balance.

These strategies may help when money is tight

It’s not unusual to fall behind on credit card payments when experiencing financial difficulties. With rising living costs, many people struggle to cover their bills. If you’re struggling to pay your credit card bills because of financial worries, the following strategies may help you.

Communicate with your credit card issuer: Honesty is always the best policy. If you’re feeling added financial stress at this time and know that you can’t pay your credit card bill, reach out to your card issuer. Some credit card issuers have hardship programs that could help you lower your payments or save on interest costs while you navigate a challenging financial situation.

Change your due date: If you’re struggling to pay your credit card bill because you have several other bills due at the same time every month, you can ask to change the due date. Trying to cover multiple costly expenses days apart would cause anyone stress. A credit card bill due date change could make your credit card expense more manageable.

Don’t ignore your credit card bills

We all make mistakes, so an occasional late payment isn’t the end of the world. But multiple late or missed payments can significantly impact your credit and could lower your credit score. A good credit score can qualify you for more opportunities in the future, like a low-interest loan.

It’s essential to understand how your everyday choices impact your credit. Managing your credit card usage and payments carefully is the best way to improve your financial well-being. Using tools like the ones mentioned above could make managing your personal finance matters easier.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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