Author: SHO

Looking for that stimulus money in your bank account? Check your mailbox

Some Americans are still waiting for their stimulus checks, but they might be looking in the wrong place.

Social Security beneficiaries as well as taxpayers with direct deposit information linked to their bank accounts may expect to get their stimulus money in those accounts, but some individuals are receiving their checks by mail instead. The Internal Revenue Service said people with direct deposit set up may still receive a check in the mail if the bank account information is incorrect, or if the individual’s financial institution on file rejected the direct deposit. “In either case, your payment will be mailed to the address we have on file for you,” the agency said on its FAQ page.

See: These Americans were left out of the stimulus package and still need help to weather the coronavirus pandemic

The problem? Not everyone may have the most up-to-date mailing address on file, especially if they have not yet filed their taxes (or are not required to do so) or if they have moved since filing their taxes or updating their Social Security information. The IRS tells individuals the change of address must be processed before the payment is scheduled.

“There’s no way to fix the problem right now,” said Chris Cooper, an enrolled agent in San Diego. “We have nobody in the government to talk to — that’s the real problem.” Those still looking for their stimulus money don’t have many choices right now aside from trying the IRS’s “Get My Payment” tool, designed for Americans to input their banking account information or to check the status of their stimulus checks.

The tool has not worked for everyone. Some people are seeing an error message when they input their personal information, and are told their credentials do not match what is already on file. (Individuals are asked to input their Social Security number, birth date and physical address.) The LA Times has reported inputting addresses in all caps could help, or removing punctuation from street addresses.

Cooper was able to update his banking information with the IRS tool and it worked, he said, but he also heard scenarios where an update was made and the recipient still saw a check come in the mail. “It doesn’t seem like we have clear answers as to why,” he said.

The IRS has a reduced staff at the moment, and advises Americans to check for updated information on its site rather than call the agency.

More than 90 million people have already received their stimulus money, and the IRS expects to place five million checks in the mail each week for up to 20 more weeks, according to the House Ways and Means Committee.

Also see: The best way to spend your $1,200 stimulus check, according to financial advisers

There are other reasons someone may not have gotten the money yet, including if the individual is claimed as a dependent by another taxpayer, debt collectors siphoning the assets or ineligibility because of income limits. Some taxpayers may also be the victims of glitches, because of prepaid debit cards from tax refunds.

Waiting for those checks can be stress-inducing, especially for the people suffering from the impact of the coronavirus crisis. Record levels of Americans have lost their jobs — the unemployment rate jumped to 14.7% in April, up from 3.5% two months prior — and others are unprepared for retirement, even if they are chronologically close to retirement age.

People who are eligible for a stimulus check and don’t receive it this year will be able to claim it as a credit during tax time next year, in which case they wouldn’t actually get the money until then, Cooper said. “The problem is, they won’t get it now,” he said.

Market Brief: Steering Cruise Lines Through Rocky Waters

Steering Cruise Lines Through Rocky Waters

Steering Cruise Lines Through Rocky Waters

Goldman Sachs on Why Brent Needs to Stay at $30

Goldman Sachs on Why Brent Needs to Stay at $30

Buffett Exits Airlines

Buffett Exits Airlines

Bankruptcy Is a 'Gift' for States, Former Illinois Pension Chair Says

Bankruptcy Is a ‘Gift’ for States, Former Illinois Pension Chair Says

Don't Assume That Pain is Over for Stocks and Oil

Don’t Assume That Pain is Over for Stocks and Oil

Nasdaq Says Tech Companies Will Soar This Earnings Season

Nasdaq Says Tech Companies Will Soar This Earnings Season

Volatility Continues as Crude Crashes

Volatility Continues as Crude Crashes

Tax Season Silver Linings

Tax Season Silver Linings

'I'm Very Concerned' for Small Businesses: Fmr. Secretary of Labor

‘I’m Very Concerned’ for Small Businesses: Fmr. Secretary of Labor

Edward Jones On Maneuvering Historic Volatility

Edward Jones On Maneuvering Historic Volatility

Jim Rogers: Worst Yet to Come for U.S. Markets

Jim Rogers: Worst Yet to Come for U.S. Markets

Gearing Up for Big Bank Earnings

Gearing Up for Big Bank Earnings

J.P. Morgan on When the Economy Will Surge Again

J.P. Morgan on When the Economy Will Surge Again

Preparing For Economic Recession

Preparing For Economic Recession

BNY Mellon on the Market's Next Move

BNY Mellon on the Market’s Next Move

Stimulus Bill Hits Roadblock, Fed Promises More Support

Stimulus Bill Hits Roadblock, Fed Promises More Support

Ackman to Trump: Shut Down the U.S.

Ackman to Trump: Shut Down the U.S.

Markets Remain Volatile as Fed Cuts Rates

Markets Remain Volatile as Fed Cuts Rates

Virus Fears and Oil Price War Roil Markets

Virus Fears and Oil Price War Roil Markets

Will Central Banks Calm Volatile Markets?

Will Central Banks Calm Volatile Markets?

Vacation real-estate markets are ‘toast’ because of the pandemic as Airbnb owners rush to offload their homes, Redfin CEO says

Redfin RDFN, +8.16% is the latest real-estate company to jump back into the iBuying game after a coronavirus-related shutdown.

The Seattle-based brokerage said Thursday that its RedfinNow segment, which provides instant offers to home sellers to purchase their properties, would resume home-buying activities. In doing so, Redfin joins fellow iBuyers Opendoor and Offerpad in re-entering the housing market. Zillow ZG, +9.33% also said Thursday that it would slowly relaunch its iBuying arm, Zillow Offers, in the coming weeks.

So-called iBuyers represent a small but growing share of the overall real-estate market. Nearly 7% of homes sold in Raleigh in the third quarter of 2019 were bought by iBuyers, according to a December report from Redfin, more than any other market nationwide.

Despite the coronavirus outbreak causing a downturn in home sales and listing activity through March and April, Redfin managed to beat expectations with its first quarter earnings as the company posted a net loss of $60 million. A year ago, Redfin had reported a larger net loss of $67 million, for comparison.

Read more: Mortgage rates rise from record lows — and signs are emerging that Americans are preparing to re-enter the home-buying market

The company’s CEO, Glenn Kelman, has said that the company’s tech offerings — including virtual home tours and open houses — will help it weather the pandemic. But while signs are starting to emerge that Americans may begin to re-enter the housing market, the speed of the recovery is far from certain. Fannie Mae FNMA, +0.59% reported that consumer confidence in housing had fallen to the lowest level since November 2011.

MarketWatch spoke with Kelman ahead of Redfin’s earnings release to discuss how the pandemic has affected the U.S. housing market and what will change about iBuying in the wake of COVID-19.

MarketWatch: Redfin has announced that the company’s iBuying division, RedfinNow, will resume operations following the coronavirus-related pause. What drove that decision?

Glenn Kelman: The reason we’re reopening it is because we think it’s a reasonably good time to own a house. Inventory is down 25% year-over-year, and home-buying demand is almost back to pre-pandemic levels. So we’re willing to take a risk again. I think we’ll lower the amount we’re willing to pay for a house, just to give ourselves more margin for error.

It was a harrowing couple of months. We had to ensure that the homes we had bought before the pandemic could still be sold once the pandemic had started, and you just can’t forget that easily. So instead, you just lower your offers a little bit, and that gives you some leeway.

MW: Is RedfinNow introducing any new procedures because of the coronavirus pandemic?

Kelman: I feel like what’s changed about our approach in iBuying specifically is just more about margin. You always knew that you had to have a margin for error — that there was a possibility of a downturn and that every offer you made had to account for that. But it’s another thing to actually go through that. So I think there will be more margin for error, but also less tolerance for a real project. If it’s a piece of work and it’s going to take six months to get it back on the market, you just can’t wait that long to figure out if you offered the right price to the homeowner. The market could change.

If you took a basketball shot, and six months later somebody told you whether it went into the hoop, you’d never get to be a better basketball player, right? So I think we’re just being more disciplined about the kinds of homes we buy. If you make a mistake on five houses, you should not buy 5,000.

MW: Do you think that the pandemic could make iBuying more popular, since it eliminates a lot of the in-person interactions the home-buying process typically requires?

Kelman: That wouldn’t be my guess. The homeowner who might be more anxious to sell their home, we’re going to find out whether more of them take offers in the next few weeks. But the other part you have to consider is the money man. The people who are providing capital for iBuyers may have a different appetite for risk on the other side of this. If iBuyers all come into the market at the exact same margin they were at two or three months ago, I think our acceptance rates are going to be really high.

But my guess is that they’re going to price the risk into their offers. And I don’t know how consumers are going to react. When we make offers, if we give ourselves just a little more room for all the risks that we’re taking, will people still accept it?

‘It used to be that working class folks could reasonably aspire to buy a house. And now I think buying a house has really become a privilege.’

— Glenn Kelman, CEO of Redfin

MW: You mentioned earlier that there’s been a resurgence in home-buying demand — what is driving that?

Kelman: Probably the bifurcation of the American dream. It used to be that working-class folks could reasonably aspire to buy a house. And now I think buying a house has really become a privilege, and the privileged class is doing better in this pandemic than the people who work in restaurants and perform other in-person services. So unemployment is going to be bad for one part of America; for another part, it isn’t as bad. And so that’s the part that’s buying a house.

And maybe the other dimension of this is just that there’s been an affordability crisis for so long. There’s structural reasons that there aren’t enough homes for enough homes in America. There is just a large number of people who have been trying to buy a house for two, three, four years, especially in really expensive markets. And if this pandemic is an opportunity to do that, with less competition, you’re going to take it.

Also see: Home prices could fall by as much as 4% because of the coronavirus pandemic, Zillow says

MW: What’s your take on the state of secondary markets and vacation markets right now?

Kelman: Toast. Those are going to be in tough shape. There’s a whole economy that was built around the liquidity there that Airbnb provided. You could get pretty deep into debt and still have somebody pay your mortgage every month because Airbnb and other travel websites were so good at finding someone to rent it out. And I don’t think many of those folks have the reserves that Marriott MAR, +1.38% or that Hilton HLT, +0.40% does.

Investors who own Airbnb properties are looking for immediate liquidity. At some level it’s Redfin, Zillow Z, +9.08% and Opendoor picking up where Airbnb left off. If they can’t get cash flow through one website, they’ve got to sell it through the other.

‘There’s a whole economy that was built around the liquidity there that Airbnb provided.’

— Glenn Kelman

MW: Some have suggested that the coronavirus pandemic could lead to a migration out of major cities, especially ones like New York that were hit hard by the outbreak. What’s your take on this?

Kelman: It’s on like Donkey Kong. There’s going to be a major move. That was already underway just because of the affordability crisis. People are leaving New York for Philadelphia and are leaving San Francisco for Sacramento and even Phoenix. Seattle was starting to lose people to Tacoma, which is just down the street.

I think some of it is about consumer wariness where we’re living in close quarters with other people. But most of it’s about employer flexibility. Employers that were really stuck on whether to let people work from home have gotten completely unstuck. And if you can work for Goldman Sachs GS, +1.68% , but not in New York, if you can work for Amazon AMZN, +0.50% , but not in Seattle, well, why would you pay the premium?

(This interview was edited for clarity and length.)

From cat tents to garden gnomes — the dismal economic outlook hasn’t stopped people from making impulse purchases in quarantine

Carrie Harris, 31, never thought she would buy a $60 cat tent.

“I was zooming ZM, -1.52% with my friends from college and I admired one of their cat beds in the background that sort of resembled a tent,” Harris, a Fairfield, Conn.-based polar scientist, said. “A different friend then told us about this Australian company that made tiny realistic tents for cats that her co-worker had bought.”

“We all looked at the website and jokingly picked out a tent for my cat. They all know I’m very into camping and very into my cat, but I’m not sure they believed that I actually purchased it until it showed up a few weeks later.”

The site she bought it from, catcamp.co, has seen “an uptake in sales over the past couple of weeks, which has been great for our small business,” Cat Camp co-founder Jaclyn Benstead told MarketWatch.

“With everything that is going on in the world right now, people are wanting to spend money on the little things that can bring some joy or happiness during quarantine, even if it’s a present for their cats,” Benstead said.

Over the past two weeks, the company has seen a 110% increase in sales compared to early April, Benstead said, adding that “April sales were up 50% higher than March, so we are pretty happy.”

Carrie Harris, pictured, said made an impulse of $60 for a cat tent.

Carrie Harris

Although Harris’ cat, Milo, seems to enjoy napping in her new tent alongside Harris while she is working, she says she wouldn’t have bought the feline-oriented outdoor gear if she wasn’t “on lockdown” because of the coronavirus pandemic.

“It is a really cute and creative cat bed, but I also can’t think of a practical reason for a cat to need a functional tent,” she said.

Harris is hardly alone.

Some 35% of Americans say they have made impulse purchases to cope with the stress of the coronavirus pandemic, according to a recent survey conducted by Credit Karma, a personal-finance website where consumers can check their credit score.

Despite the fact that consumer sentiment has taken a huge dive and more than 33 million Americans have filed for unemployment over the past month and a half, nearly one in five people say they are spending more money now than before the coronavirus outbreak hit, Credit Karma found. Among the people who said they’re spending more, 1 in 10 said they have gone more than $1,000 over their budgets since sheltering in place.

Impulse purchases and a hoarding mentality make “complete sense” to Kelly Goldsmith, an expert on consumer behavior in the face of scarcity, and a former contestant on the TV show “Survivor”.

‘When people started seeing pictures of empty shelves at stores, many for better or worse stocked up on necessities because they feared they wouldn’t have access to them in the near future’

When shelter-at-home orders began in several states in early March, consumers flocked to supermarkets and stores like Walmart WMT, +0.86%, Costco COST, +0.30%, BJ’s BJ, +1.11% and placed orders on sites like Amazon AMZN, +0.50% and eBay EBAY, +1.88%.

Goldsmith, who teaches marketing at Vanderbilt University, refers to this as the “secure the basics phase”.

When people started seeing pictures of empty shelves at stores, many for better or worse stocked up on necessities because they feared they wouldn’t have access to them in the near future, she said.

After panic buying and hoarding mentality began to wane, and foot traffic slowed at brick-and-mortar stores, phase two began: comfort buying.

Making impulses purchases is one way consumers feel they regain their sense of control in the face of unprecedented uncertainty stemming from the coronavirus pandemic. “Since most of us aren’t leaving our homes, it’s not even about looking good at this point, it’s about feeling good,” Goldsmith said.

This was certainly the case for Heidi Hudson, 42, a scheduling coordinator and adjunct American history professor at Hawkeye College, a community college based in Waterloo, Iowa.

On Saturday she went to Menards, a chain home improvement store, intending to purchase a hammock and wooden base. Instead, she came home with two garden gnomes which cost $99 each.

“I could not decide between the two so I bought them both,” Hudson said. “Three years ago when I bought my house [Menards] had a giant gnome and I wanted it, but just couldn’t do it at the time. So when I saw these I literally jumped at them.”

Heidi Hudson of Waterloo, Iowa, purchased these two garden gnomes for $99 each.

Heidi Hudson

‘It is part of self-care in a weird way. It makes me smile to see [the gnomes] in my yard…This will be over someday, but until then I am doing what I can to make myself feel happy.’

The next day she went back to buy the hammock and stand for another $99. Hudson has been working from home since early March and said she wanted the hammock so she would have an excuse to go outside more, especially during the summer.

Like Harris, she said if she wasn’t social distancing, she wouldn’t have purchased the hammock and the gnomes, but she doesn’t regret her decision.

“It is part of self-care in a weird way,” Harris said. “It makes me smile to see [the gnomes] in my yard and the sun warms my soul in my hammock. This will be over someday, but until then I am doing what I can to make myself feel happy.”

Heidi Hudson intended to buy a hammock, but instead spent $200 on garden gnomes.

Heidi Hudson

‘It’s like gaining a pound here or there and saying ‘when life gets back to normal I’ll look fine.’ But if you have to lose 20 pounds that’s going to be really hard.’

— Kelly Goldsmith, marketing professor at Vanderbilt University

Spending a couple of hundred dollars here and there “feels inconsequential at a time and place when so many scary things are looming in future,” Goldsmith added. But if people continue to spend impulsively it could become problematic.

“It’s like gaining a pound here or there and saying ‘When life gets back to normal I’ll look fine.’ But if you have to lose 20 pounds that’s going to be really hard.”

The same goes for debt.

Already millions of Americans are skipping their credit-card and mortgage payments as the coronavirus pandemic puts them out of work.

Also see:Your bank could lower your credit-card limit — what to do if that happens

“When this pandemic ends and you’re $10,000 in debt, it’s going to be a real wake up call,” Goldsmith said. But people won’t likely realize the damage they’ve done until their application for a credit card or a loan is declined because of a lower credit score.

How you can stop yourself from making impulse purchase

One way to stop yourself from purchasing something impulsively is to wait 24 hours to see if you still want to make the purchase, said Credit Karma CEO and founder, Ken Lin.

Another good rule of thumb is to consider whether you have enough cash on hand to make the purchase in the first place. “If you have to borrow or are thinking about a buy now, pay later option to make it work, you should probably sit on the purchase and save up for it instead,” Lin said.

Finally, don’t be tempted to buy things based on what your friends are posting on Instagram or Facebook FB, +0.51% FB, +0.51% or other forms of social media.

“Don’t buy something just to keep up with friends or influencers on social media, it isn’t worth it,” Lin said. “Ask yourself if you’d want to make the purchase if you hadn’t seen it on social media.”

Next Avenue: 6 places to get free, professional financial advice now

This article is reprinted by permission from NextAvenue.org.

“When I was a boy and I would see scary things in the news, my mother would say to me, ‘Look for the helpers. You will always find people who are helping.’” This quote by Fred Rogers, the soft-voiced creator of PBS’ “Mister Rogers’ Neighborhood,” couldn’t be more apropos today. Thankfully, personal finance helpers are stepping up to lend a guiding hand gratis to those who need it due to the pandemic.

The need is great.

Millions of Americans have lost their jobs, had to close their small businesses (possibly forever) or seen their retirement accounts shrink drastically. An April 2020 online MassMutual poll of 1,000 Americans revealed that nearly a third of boomers and Gen Xers (29% and 32% respectively) say they’re stressed about their personal finances. And a recent Gallup Poll found that half of Americans surveyed age 50 to 64 are worried about maintaining their standard of living.

Recent history suggests a potentially frightening financial future for older adults. A look at economic ripple effects of the Great Recession of 2008-2009, from the National Council on Aging and LeadingAge LTSS Center @UMass Boston, found a drop in total net wealth and an increase in debt for people 60 and older.

Struggling with daily expenses

“Unfortunately, many Americans have been financially impacted by the COVID-19 pandemic and market downturn and are struggling with day-to-day expenses,” says Teresa Hassara, head of workplace solutions at MassMutual.

Propelled by the rough financial times due to the coronavirus crisis, a smorgasbord of free financial advice and guidance is now available — ranging from one-on-one virtual financial planning consultations to employers opening up helplines for employees.

“I needed a way to give back in a meaningful way,” says Kristen M. Buchanan, a financial planner at Cincinnati Investment Advisors. “I looked at where I could help, and financial planning is one of the most impactful ways to change people’s lives.”

Free counseling

The Financial Planning Association – Buchanan signed on to offer free counseling through The Financial Planning Association, the principal membership group for Certified Financial Planners (CFPs). It now has a roster of more than 60 volunteer CFPs around the country on its site. They’re providing short-term guidance to those who need it due to the pandemic. You can call or email to set up a meeting.

Many people want that kind of help.

Looking for financial advice from a professional

In the new 2020 Financial Literacy Survey from the National Foundation for Credit Counseling and Discover Financial Services, 75% of U.S. adults ages 55 to 64 and 68% of those 65 or older said they could benefit from advice and answers to everyday financial questions from a professional.

Buchanan told me that most of her pro bono sessions have revolved around basic budgeting.

“A lot of the people are worried about ‘How am I going to get through this pandemic and pay bills?’” she says. “If I can alleviate some of that stress and get them to have some understanding about their finances and how to live without constantly worrying about money, that’s my reward.”

Maura Griffin, founder of the Blue Spark Financial advisory firm in New York City and Lenox, Mass, has started hosting free, regular 45-minute Zoom calls to answer questions. “It is something I will continue to do, on a monthly or quarterly basis, even after the pandemic,” she says.

“The questions are varied,” Griffin notes. “Many are about things like what the PPP (the federal Paycheck Protection Program for small businesses) loans cover; how to approach creditors and what to do with the $1,200 stimulus check.”

Where to find pro bono financial advisers

Griffin offers perspective, too. “I also talk about history of market turmoils and give solace that we’ve been here before, just a different set of circumstances.”

The National Association of Personal Financial Advisors also has on its site a growing list of more than 50 no-commissions financial planners offering pro-bono services.

The Association for Financial Counseling & Planning Education (AFCPE), along with the Wells Fargo Foundation and the nonprofit military assistance group Yellow Ribbon Network, is now offering free virtual counseling and coaching sessions to people who’ve experienced a negative change in income and/or budget due to the coronavirus outbreak.

“Our counselors are fielding a lot of questions about the stimulus checks, how to navigate through job loss and unemployment, and how to get out of debt, improve credit and create a budget and spending plan to navigate through this uncertain time,” says Rebecca Wiggins, AFCPE’s executive director.

“No question or issue is too big or too small,” Wiggins says. “People can come if they just have questions, want to finally get some assistance to make a realistic budget or if they are really struggling and don’t know where to even start.”

AFCPE also offers links to free COVID-19 financial resources on its site.

The XY Planning Network (XYPN), an organization of fee-only financial advisers, has more than 90 members available to help people with free emergency financial planning virtual consultations.

“We recognized the impact COVID was going to have on the economy and our advisers (who usually charge $200 to $300 an hour) stepped up and said this is something we’d like to offer,” says XYPN co-founder and CEO Alan Moore. “So far, there have been a lot of cash flow questions, queries on how to apply for unemployment and ‘Should I be taking money out of my 401 (k)?’ They are coming with a particular pain point they want to address, and typically have been impacted directly by job loss.”

Free credit counseling

The National Foundation for Credit Counseling – Free credit counseling agencies can also assist with problems ranging from bankruptcy to student loan debt to an evaluation of your budget and financial picture. A good place to start is The National Foundation for Credit Counseling website.

Employees can also see if their employers are offering free financial counseling, perhaps through their Employee Assistance Plans.

Potential government benefits

Benefits.gov is a federal agency partnership site where you can find government benefits related to unemployment assistance, health care and food and nutrition. Its Benefit Finder tool will let you see if there are government benefits you may be eligible to receive.

If you’re feeling shaky about your finances, don’t be too proud to ask for help. Your future financial security is at stake.

“Many people really need guidance right now on setting up a budget and managing credit card debt. And that’s why I am a financial planner,” says Dawn Santoriello, president of DS Financial Strategies in King of Prussia, Pa.

She’s offering free sessions to those in need, too. “My goal is to give someone peace of mind, make sure he or she is on track. It’s the right thing to do.”

Mister Rogers would approve.

Kerry Hannon is the author of “Never Too Old to Get Rich: The Entrepreneur’s Guide to Starting a Business Mid-Life.” She  has covered personal finance, retirement and careers for The New York Times, Forbes, Money, U.S. News & World Report and USA Today, among other publications. She is the author of a dozen books. Her website is kerryhannon.com. Follow her on Twitter @kerryhannon.

This article is reprinted by permission from NextAvenue.org, © 2020 Twin Cities Public Television, Inc. All rights reserved.