Pandemic-Induced Goals?

The current period of job loss and reduced income has affected people in different ways. The result? Different households face different financial challenges at this point. Whatever your situation, now is s a good time to assess your financial situation, evaluate your priorities, and take steps to improve your situation as necessary. If you’d like some help, your local ISU Extension financial educator is available to work with you, providing free, non-commercial information and a sounding board as you make your plans.

  1. Some of you have been living with seriously reduced income – and still are. Your task has been to find every possible way to reduce your expenses and/or find new income and make use of new resources, including public assistance if you qualify. You must communicate with all of your creditors, but avoid making promises you cannot keep. If returning to something like normal looks unlikely, you may need to consider major lifestyle changes.
  2. Some of you lost income for a while, but are now back to an income you can live on. It is likely that you got behind on bills, built up credit card debt, and/or depleted your savings during your crisis. Strong focus on repaying those debts and building up emergency savings will get you ready in case of an unexpected expense or another loss of income. Careful examination of your spending choices will help you regain equilibrium and then build a strong cushion.
  3. Others of you had stable income, but have realized that if you did lose income, you would be in a very difficult spot. Facing the reality that you lack basic financial security can motivate you to build up savings and pay down debt. Start by cutting your living expenses so that your regular monthly expenses are 10-25% less than your income. Putting the extra funds toward savings and expedited debt payment will build you a cushion that will bring peace of mind and make your life easier if/when hardship strikes.
  4. Still others have stable income, and have felt secure that even if you did have a cutback, you would be okay. In your case there is no obvious need for change, but it’s wise to maintain control of your finances through good planning. You may wish to build an even stronger savings cushion, after seeing others struggle with lost income for six months or longer. As you build savings, seek out accounts that pay slightly higher interest while still providing ready access to your funds.
Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Debt? Make A Plan

The financial impact of COVID-19 has many people worrying about paying back borrowed money and wondering where to start. If you’d like help after reviewing the steps below, Iowa State University Extension Family Finance Specialists across the state are available for educational consultations that are free and confidential.

To get started, take 3 steps to manage your debt.

First, understand your debts. Make a chart or a list showing each debt, with who you owe, the amount you owe (including interest), and projected payoff date (if available). Having this clear view of your total debt picture will help you plan your approach.

Second, consider what the consequences are if you do not pay on time. In most cases, late payment or failure to pay will hurt your credit score. But in some cases, the consequences are more serious: for example, you may lose a service, such as water or electricity; or your vehicle may be repossessed. Considering the consequences will help you decide which bills to prioritize. NOTE: eventually it will be important to repay all your debts, but in the short term, it is advisable to prioritize those that are essential to your family’s well-being or to keep your job.

Third, plan a payment strategy that works best for you. After prioritizing the bills that are critical to your family’s well-being, you still may have several other debts to address – which of those should you pay first? You should, of course, keep paying the agreed-upon monthly payments if possible, but if you have extra money to put toward your debts, where should you start? Some people start by attacking the debt with the lowest balance – they are motivated by the idea of completely wiping out a debt so they have fewer bills to think about. You will actually save the most money by first focusing on the bill with the highest interest rate. To explore debt repayment options, check out PowerPay, a free and non-commercial debt calculator sponsored by Utah State University Extension.

Taking control of your debts starts with three steps: understanding it, being aware of consequences of not paying debt, and having a plan to reduce debts. It’s not easy to become debt-free, but for most consumers it can be accomplished with hard work and dedication. Be sure to contact your local ISU Extension financial educator if you’d like some assistance with sorting through your options.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Juggle—Stop—and Slide Expenses

Juggle—Stop—and Slide your personal expenses throughthis COVID-19 global pandemic using tools, actions and strategies to protect your family.

Juggle– Put money you would have normally spent for things (e.g., personal care, commuting costs and child care) toward other essential bills. Rework your budget and reallocate money you are not currently spending.  We shifted money not spent on gas and eating out. Those dollars are now budgeted for extra costs for an unplanned internet upgrade. Consider online budget tools like this one from the University of Wisconsin.

Stop- Take immediate action to stop all excess spending. Ask: “How can we reduce spending?”

  • Substitute a less costly item
  • Conserve resources and avoid waste
  • Cooperate with others by trading or sharing resources
  • Save money if we do it ourselves
  • Do without

These ideas and more are available at the University of Minnesota’s “Strategies for Spending Less” page. You’ll find other resources on ISU Extension’s Finding Answers Now page

Slide- Take advantage of Covid19 Special offers and slide a portion of the bill forward.

Our mobile phone carrier will not charge a late fee or terminate service through June 30. To qualify due to hardship a short online form is required.   Iowa utility providers (i.e. energy and water) may provide relief payment options, assistance programs, and low-cost steps for customers according to the Iowa Utility Board.

Free and confidential consultations with ISU Extension financial educators are available to all Iowa residents. We can provide tools and information to help you revise budgets, prioritize spending and link to community resources. 

Find your local Extension educator or contact Iowa Concern 800-447-1985 for information. Consider our free booklet: “Planning to $tay Ahead”  English and Spanish

Carol Ehlers

Guest Blogger: Carol Ehlers,
Human Sciences Specialist in Family Finance

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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An Ounce of Prevention

I shouldn’t be surprised by the increased number of bogus offerings, threats and scare-tactics arriving in my inbox, mailbox and phone. Scammers are offering everything from face masks to toilet paper and expedited deposits of the stimulus payments. Identity theft and related scams often spike during times of crisis. So…desperate times require extra diligence on our part, to protect our identity and our hard earned money.

The three national credit-reporting companies, Experian, Equifax and TransUnion, are offering free weekly online credit reports through April 2021. By requesting a free credit report at, an individual will get a report from all three companies with the single application.

By establishing a “myEquifax” account at  or by calling 866.349.5191, individuals can receive six free credit reports every twelve months from Equifax, through December 2026…that is in addition to the one free report that can be obtained each year from all credit reporting companies at

While checking your credit report is an important habit, there are other things individuals can do to protect their identity and improve their score.

  1. Pay all your bills on time if possible. It may get difficult with layoffs and furloughs, but try to make at least your minimum debt payments by their due date every month to avoid hurting your credit score.
  2. Contact your lenders for help and ask about hardship options as soon as possible—ideally before you miss a payment. Lenders may be able to temporarily lower your interest rate or payment amount, or pause your payments for a period of time. Lenders may also be able to place your loans in deferment or forbearance, which would eliminate payments for a time; as a result, there would be no late payments to report to the credit bureaus. Under the CARES Act, when a consumer contacts their creditor before falling behind in payments, and reaches an agreement with the creditor to a modified payment plan (reduced payments or forbearance), then the creditor may not report late or missed payments to the credit reporting company as long as the consumer follows the agreement. That protection for the consumer lasts until the later of July 26, 2020 OR 120 days after the COVID-19 national emergency declaration ends.
  3. Check your credit regularly and make sure the information is accurate. You can identify any potentially fraudulent activity and respond to it before it damages your credit.
  4. Dispute inaccurate information immediately. Remember that disputes need to be made with each credit bureau where the disputed information appears.
  5. Contact your service providers. If you do not think you can pay your utility, cell phone, cable or other monthly bills, reach out to your providers to see if they offer flexible payment options during this time.
  6. Be extra vigilant about protecting your identity. If you fear identity theft may occur or has occurred in your name, you can also place a free security freeze on your credit file so lenders cannot gain access to it. This prevents people from applying for credit in your name. You can lift the freeze at any time, for free.
  7. Seek financial management help. The Iowa Concern Hotline (800.447.1985) can put you in touch with a financial consultant who will provide confidential information and discussion, free of charge.
  8. For those with investment or retirement accounts, U.S. market fluctuations could cause significant concern. Before you make any rushed decisions with your investments, consult a reputable investment professional who can look at the details of your situation and provide personalized financial guidance on what actions, if any, you should consider at this time. Not sure where to start? The professionals at the firm holding your investments or with your employer’s retirement plan can be a first contact for analysis of your situation.
  9. Make a budget and plan ahead. If you think current conditions may affect your income or finances, consider tightening your budget to help make sure you have enough funds to cover your expenses.

For more information about free help and guidance during these difficult times, check out

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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How student loan borrowers can benefit from COVID-19 relief

The CARES Act suspends payments on federal student loans. Consumers hit hard by the effects of the COVID-19 pandemic can find some help, thanks to new legislation passed by Congress. Those who can benefit include some student loan borrowers.

The federal CARES (Coronavirus Aid, Relief, and Economic Security) Act suspends payments on federal student loans until Sept. 30. The Iowa Attorney General’s Office and Iowa College Aid are spreading the word about benefits for borrowers. “The economic pain caused by this pandemic is devastating for many,” Attorney General Tom Miller said. “I want to ensure borrowers and employers are aware of these benefits.” Miller also urges private lenders and creditors not part of the CARES Act to provide a reprieve for distressed borrowers.   “We’re all in this together,” Miller said. “Let’s reach out, be compassionate and treat each other right.”

If you are paying off student loans, here’s what you need to know: Not all loans qualify. The suspension mandated in the CARES Act is only for loans held by the U.S. Department of Education. It does not cover FFELP (Federal Family Education Loan Program) loans or Perkins loans held by private lenders, nor does it cover private loans. However, some private lenders might provide these benefits on a voluntary basis. If you’re not sure whether you qualify, contact your loan servicer. If you don’t know who your loan servicer is, you can look it up at Federal Student Aid,

If your loan does qualify, you don’t need to do anything. Your payments will automatically stop from March 13 through Sept. 30. Interest is suspended, too. No interest will accrue on your loan until Sept. 30, so your outstanding loan balance won’t grow while your payments are suspended. So is collection on defaulted loans.

If you’re in default, your wages will not be garnished until Sept. 30. You can still pay if you want to. If you choose to continue paying off your loans during the suspension, your monthly payments will be the same as before the suspension. You won’t lose eligibility for loan forgiveness.

If you’re in a public service loan forgiveness program or an income-driven plan that requires a certain number of consecutive payments, this period of suspension will not count as an interruption. You will still be responsible for your loan. After Sept. 30, you will be responsible for paying on your loan once again. The amount will not be reduced. If you’re an employer, you can contribute up to $5,250 toward each worker’s student debt through Dec. 31 on a tax-free basis.

Keep in mind that guidance on student loan suspension is subject to change. You can find recent news and current updates at Federal Student Aid,
Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Managing Personal Finances in Tough Times

Audio Blog

Concerned about your finances during these uncertain times, but not sure where to start? ISU Extension and Outreach invites you to get in touch with one of our Human Sciences financial educators. They can help walk through ideas and options to revise a budget, prioritize bills, pay down debt, connect with community resources to stretch reduced incomes, and other personal finance topics—totally free of charge.

Our 11 financial educators are listed below with the counties they serve and are available to talk with anyone in Iowa. Because Extension and Outreach staff are currently working from home, please send an email. They will get back to you during regular business hours within 48 hours. You also can leave a phone message at Extension and Outreach’s toll-free Iowa Concern Hotline (800-447-1985) to have someone get back to you.

Contact an ISU Extension and Outreach Financial Educator

Central Iowa – Kalyn Cody  [Dallas, Madison, Polk, Warren]

North Central Iowa – Barb Wollan  [Boone, Hamilton, Hardin, Humboldt, Marshall, Story, Webster, Wright]

Northern Iowa – Brenda Schmitt  [Cerro Gordo, Emmet, Floyd, Franklin, Hancock, Kossuth, Mitchell, Palo Alto, Winnebago, Worth]

Northwest Iowa – Jan Monahan   [Clay, Dickinson, Lyon, Monona, O’Brien, Osceola, Plymouth, Sioux, Woodbury]

West Central Iowa – Carol Ehlers  [Audubon, Buena Vista, Calhoun, Carroll, Cherokee, Crawford, Greene, Guthrie, Ida, Pocahontas, Sac, Shelby]

Southwest Iowa – Sandra McKinnon  [Adams, Adair, Cass, Clarke, Decatur, Fremont, Harrison, Mills, Montgomery, Page, Pottawattamie, Ringgold, Taylor, Union]

Southern Iowa – Joyce Lash  [Appanoose, Davis, Jasper, Jefferson, Lucas, Mahaska, Marion, Monroe, Poweshiek, Van Buren, Wapello, Wayne]

Southeast Iowa – Mary Weinand  [Des Moines, Henry, Iowa, Johnson, Keokuk, Lee, Louisa, Washington]

East Central Iowa – Phyllis Zalenski  [Benton, Delaware, Dubuque, Jackson, Jones, Linn]

Eastern Iowa – Casey Codner  [Cedar, Clinton, Muscatine, Scott]

Northeast Iowa – Jeannette Mukayisire  [Allamakee, Black Hawk, Bremer, Buchanan, Butler, Chickasaw, Clayton, Fayette, Grundy, Howard, Tama, Winneshiek]

The information provided is educational in nature to help you make your own informed decisions and is not intended to substitute for professional advice or serve as an endorsement of any financial product or service.  Consult with licensed professionals prior to implementing any of the information provided to determine the course of action is best for you.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Communicating with creditors

When a tight financial situation leaves you truly unable to pay all your bills according to the prescribed schedule, then difficult choices must be made, as discussed in my previous post. After evaluating your situation and figuring out the best strategy you can come up with, the next step is to make some phone calls. Note: in some cases emails or on-line communication may be the company’s only option, but I encourage you to first attempt to reach creditors by phone.

As much as you might dread the phone call, communicating with creditors is essential if you cannot pay on time. The fact that you called and explained your situation will make a huge difference in their willingness to work with you. This is especially true if you have previously been a reliable customer; creditors recognize the losses people are facing during this unprecedented crisis. A couple of suggestions:

  1. Be prompt – call them before your payment is due.
  2. Be honest with them – tell the truth without embellishment or exaggeration.
  3. Ask if they have any “hardship plan” that would reduce or eliminate the fees or interest that come with late payments.
  4. Don’t make promises you can’t keep. Example: sometimes people are so nervous that when the creditor says “Will you be able to pay the remaining balance by next Wednesday,” the customer just says yes, even though it is not realistic. If they want a promise that you are not sure you can live up to, consider this option: you can promise that you will make another payment by next Wednesday, although you can’t guarantee it will be the full amount.
  5. Keep a record of what phone number you called, who you talked with, the date and time of the conversation, and what exactly was agreed.

Need help with all this?  In many communities a non-profit credit counseling service is available to help you negotiate the process.  To find a reputable credit counselor near you, check with the National Foundation for Credit Counseling; either by phone or on-line, they can do a zip code search to find the member agency nearest you.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Time to refinance?

cartoon house

The uncertainty (almost chaos) that we are experiencing due to the current pandemic is hurting the economy, and is a pointed reminder of the need to plan for short- and long-term financial security. Because the Federal Reserve Board has lowered interest rates, however, there is one group who might be able to benefit from the situation: those who have a mortgage at an interest rate higher than they wish.

            How do you know if refinancing is a wise choice for you? Unfortunately, I don’t have a simple answer for that question, but I can give you a few tips on how to evaluate the decision. First, two generalizations. Consumers who are most likely to benefit are those who:

  1. Have the highest interest rates on their current mortgages; and/or
  2. Have many years left to pay on their current mortgages.

Why? Because the main benefit of refinancing is to pay less interest on your mortgage over the long term. The total interest you pay depends on the interest rate and the length of time on the loan, along with (of course) how much you owe.

            If it were free, everyone would benefit from refinancing when interest rates drop, as long as they did not lengthen the remaining term on the mortgage. However, refinancing is not free. Lenders will charge closing costs that will include a loan origination fee, along with appraisal fees and other fees. Note: fees may be lower if you stay with the same lender that holds your current mortgage, but will generally be equivalent to 1-3% of the amount of the loan. If your refinance will cost $2,000, then it is only worthwhile if you will save noticeably more than $2,000 in the long run.

            Imagine that you took out a 25-year mortgage several years ago at 4.25%, with a monthly payment of $560 plus taxes and insurance. The current balance on the loan is $78,000; it will be 16 years and 1 month till it is paid off, and you will pay $29,686 in interest during those 16 years. 

  • What if you could refinance at 3.5%?  If closing costs were $2,000 and you borrowed the money to pay those costs, then you would be borrowing $2,000. You could get a 15-year mortgage with a payment of $572 (plus T&I); the total interest you would pay would be $22,938; that would save you over $5,500 in interest! Of course your payment and savings would be lower if you paid the closing costs in cash.
  • Even better, refinancing at a 3.0% rate (15 years) would lower your payment on an $80,000 loan to $553 (plus T&I), and reduce total interest to $19,419, for a total savings over $10,000.

A caution: Refinancing only makes sense if there is no penalty for pre-paying your existing mortgage. Iowa law prohibits pre-payment penalties, so for Iowa-based loans it’s not an issue, but it is an issue to be aware of in other states. For more information, explore the Consumer Financial Protection Bureau web page on mortgages.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Lending Money in Tough Times

Man handing out money.

Times are tough when money is tight. When you are in need of money NOW, you may find banks unwilling to loan money, especially if your credit score is poor. For some, the only option is to borrow from family or friends, especially if you need the money fast.

If you are the lender, it will be hard to say no. You want to help a friend in need and if you say no, you will feel guilty if they lose everything. If you lend the money and they still lose everything, there may be hard feelings because the debt goes unpaid. If the loan is made to a family member, family gatherings will be uncomfortable. The lender may make mental inventories of anything purchased (while the debt is unpaid) especially if purchases are viewed as WANTS instead of a NEEDS.

When making the decision to lend money, it is important to keep emotions out of it. You should not lend money that you can’t afford to lose. If you do expect it to be paid back, don’t expect it to be paid back quickly. You may want to consider the money as a gift instead of thinking of it as a loan.  Then if you get the money back, it will be a pleasant surprise…instead of a disappointment when it isn’t paid back.

Another thing I have done in the past is to buy groceries or to offer to fill up the gas tank for a friend or family member.  This would free up money for the emergency that would have been set aside for gas or groceries. I have also offered to pay for a service, like painting a bedroom which helped the family member make ends meet, without having to ask for a loan. Make sure your spouse is in on the decision to lend money.

As of the 2019 tax year, the IRS has a $15,000 gift tax rule. A small loan will not make a difference, but if you do not charge interest on a loan of that amount or more, it may be considered a gift. If you do not charge interest, the IRS can say the interest you should have charged was a gift . In that case, the interest money goes toward your annual gift giving limit of $15,000 per individual. If you give more than $15,000 to one individual, you are required to file a gift tax form.  The rate of interest on the loan must be at least as high as the minimum interest rates set by the IRS.

These are tough times, especially for the farming community. Be sure to share information, phone numbers and links from the Iowa Concern Hotline.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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What Is a Soft Credit Check?

Your credit history has a great deal of impact on your life. This means you should take full advantage of the fact that the three major credit bureaus-Experian, TransUnion and Equifax-offer one free credit report each year for consumers.

Who else is checking your credit? When you check your credit report, you will find out – and you may be surprised. Have you ever received a credit card offer in the mail? Did you wonder how those credit card companies knew that you qualify for a certain credit card with a specific credit limit? It is likely that the credit card company checked your credit history before sending that offer. When someone looks at your credit history for informational or promotional purposes, this is a soft credit check, and it will appear on your credit report for your information.

Why a Soft Credit Check?

The Fair Credit Reporting Act requires the major consumer credit reporting bureaus to keep a record of all the businesses that look at your credit score.  A soft credit check is when your credit is pulled for any reason other than you applying for a loan or new credit. Examples of  soft inquiries include:

  • Reviews of your credit score or history by an existing lender with whom you have an existing line of credit
  • Reviews by potential landlords
  • Reviews of your credit for insurance purposes
  • Pre-approved credit offers
  • When you check your own credit report or score

Typically, soft inquiries remain on your credit reports for two years to give you a clearer picture of all the institutions that have checked your credit. These soft credit checks don’t affect your credit.

What Is the Difference Between a Soft Check and a Hard Check?

A hard credit check occurs after you apply for any type of credit, such as a credit card, a mortgage, personal loan or an auto loan.  Once the credit application has been submitted, the potential lender makes an inquiry into your credit score and history to see whether you qualify for the account.

If your credit report shows a large number of hard inquiries, that may negatively impact your credit score. This is because numerous hard inquiries indicate high credit risk to lenders; lenders assume that frequent applications for credit indicate that you’re having a hard time managing your finances.

No matter how many soft inquiries appear on your credit report, your credit score will not suffer in any way. The more hard inquiries you make, the more your credit score will be negatively affected by those inquiries.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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