Sarah Parker from the UCCU gives Studio 5 viewers tips on managing your money if your income has been reduced.
In these tough times, there are steps that you can take to stretch your dollars and meet financial obligations.
If you’re facing an income reduction over the next 30-60 days, consider the following:
1. Prioritize your monthly expenses. Decide what you need to pay for and what you can, at least for now, let go.
2. Pay the important things first: Housing, food, transportation, and insurance should take top priority. Dining out, clothes, and entertainment may need to be sacrificed for the time being.
3. Talk to your home mortgage lender about relief. As we discussed last month, there are a half dozen things you can do to get relief on your mortgage payment -to avoid foreclosure and stay in your home – from forbearance, to a loan modification, to a refinance or a new payment plan.
4. Talk to the people you owe money to.
5. Set aside your pride and spread the word among your friends, professional circles and neighbors that you’re looking for additional sources of income.
6. Explore new sources of money through credit card cash advances, home equity loans or lines of credit, car note loans, high interest unsecured loans or ask a family member
Over the next 60-120 days:
1. Consider a passbook loan. This is a loan against your savings. You’ll lose interest on your savings account and pay 1-1/2 to 2 percent interest in addition, but the total cost might be less than the interest charged for another type of loan.
2. Turn to social agencies such as Food Stamps, the Department of Workforce Services, and Medicaid to cover health, food or job-related needs.
3. Don’t blame yourself.
4. Network with real people who can help you. Don’t necessarily rely on online sources.
5. Be willing to lower your salary and open yourself to new forms of employment.
6. Start taking classes or training in new areas.
7. Consider a part-time project or start a small home-based business.