Smart About Money: “Why should I bother paying my mortgage or rent?”

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News reports are covering stories about lenders and landlords offering forbearance to homeowners and tenants who can’t pay their mortgage or rent because of the pandemic. Some people are starting to wonder whether they can hold off on paying their mortgage or rent too.

It’s a fair question. No one wants to miss out if there’s a deal “out there” for the taking.

As has been pointed out many times in the past few months, the reality of the Coronavirus pandemic is that everyone has been in the same storm but not everyone has been in the same boat – not by a long shot.

Millions and millions were put out of work without warning through absolutely no fault of their own. The stress, tension and the fear these individuals and families have been struggling with is enormous and tragic. They are innocent victims who find themselves truly unable to pay their bills.

Other people kept their jobs. Some even received raises in the first months of the pandemic. Most of those individuals realize how lucky they were, especially if their families and friends are in good health too. They see paying their mortgage or rent as keeping an agreement they made. Also – significantly – many see paying as an opportunity they have to “do something” to keep things as normal as possible and to help others keep making a living in these difficult days.

The individuals getting forbearance find themselves in a disaster situation. Some have never asked for help and many have to be convinced that there is no need to hesitate to ask for help now.

Forbearance is a help but it’s not “free money.” There are terms and conditions to be negotiated. Basically forbearance is usually a way to buy time but those debts are still due eventually.

While everyone has seen amazing kindness and true compassion from others, unfortunately – as usual – there are also unscrupulous individuals out there trying to take advantage of other people’s misfortune.

If you find yourself in financial difficulty, it can be especially challenging to make wise decisions while you’re scared and worried. Be very careful of what you agree to and very, very careful about what you sign. Take your time. Sleep on it. And – if necessary – consult with an objective professional (banker, CPA, attorney). Be sure you fully understand any forbearance deal you’re making. The goal: To avoid agreeing to anything today out of desperation and urgency that will only make things more difficult in the future.

Moving through the Coronavirus situation with its multiple uncertainties and unknowns, the people who had savings found themselves very grateful for the peace of mind and flexibility that safety net gave them.

As many have recently learned, having even a smaller-than-you’d-ideally-like emergency fund can make a huge difference. In a disaster, when you know that paying for necessities is not going to be an immediate problem, it cuts down a lot on the tension and fear.

No one can prepare for everything. But if your personal take-away from the Coronavirus is a determination to build a serious reserve account, you will be doing yourself a tremendous favor. No matter how small you have to start and even if it takes a while to grow your reserves. It will make a difference knowing you’re working on it and an even bigger difference if another storm comes and you’re “in a boat” that has an improved chance of staying afloat.

Nick Maffeo is the President & CEO of Canton Co-operative Bank in Canton. Have a question? Email to info@cantoncoopbank.com.

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