Managing Money in Tough Times
eXtension Financial Security: Managing Money in Tough Times
Is it hard to pay your bills or save money? Do you have an emergency fund?
Americans are feeling stressed and anxious about money. Some are wondering how they're going to pay their bills and others are concerned about their future financial security. Households can discover strategies to stretch dollars and manage money better in these tough economic times.
- What do I do if I can't pay my bills?
- How can I decrease my credit card debt?
- How can I learn more about living on less?
ANS: Many people struggling financially ignore debts
and fear contacting their creditors. This reaction will damage your credit
rating. Creditors may take action against you in an effort to get payment.
It is better to be proactive. If you're finding it hard to get your bills
paid, be the one to contact creditors and lenders. Work out arrangements
that satisfy you both. Decide how much you can pay back and set up a
Debt Repayment Plan. For sample letters to assist you while contacting
your creditors, obtain a copy of “Getting In Touch With Your Creditors”.
For a worksheet on what to do when struggling to pay bills get " When
Your Bills Pile Up" from
UNH Cooperative Extension. Also, consider enrolling in the personal money
management course “Making Money Work For You” or
consider requesting the learn-at-home series, “Getting A Grip
On Your Finances”, offered in your county.
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ANS: Consumer debt has grown steadily for the past 40 years. Since the mid-1960s, total consumer credit outstanding relative to disposable income has fluctuated in ranges of 16-21 percent. ( Federal Reserve ) That means anywhere from 16 to 21 cents of every dollar goes toward debt. Many Americans find themselves only a paycheck away from financial difficulty. A serious illness or job layoff could affect your ability to pay bills. There are a number of methods you can use to decrease credit card debt.
- The "Most Important" method focuses on repaying debts
most important to your credit rating or to maintain your family's
safety.
- The "Low Balance" method focuses on paying off bills
with the lowest balances. Then the money used for those payments
can go to pay off other debts.
- The "High Interest" method is paying off those debts
with the highest interest rate reducing the total spent on interest
charges and increasing the amount available to pay down principal.
- The "New Payment Plan" method is used when credit
payments, not including mortgages, exceeds 15-20% of your take home
pay and creditors will work with you to set up monthly installments
that are more in line with your income.
- The "Debt Consolidation" Method is being used when
a loan is obtained for the purpose of paying off all your debts.
Your monthly payment will be lower because repayment is spread out
over a longer period of time. It's very important not to take out
any additional loans until your consolidation loan has been repaid.
If credit card debt is weighing you down, consider registering for
UNH Cooperative Extension's money management course, “Making
Money Work For You”, offered in your County that
includes free access to the Power Pay Debt Reduction Calendar. Consider
requesting the learn-at-home series, “Getting a Grip on Your
Money” or obtain a copy of Your
Credit File and When
Your Bills Pile Up.
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ANS: Often making ends meet means needing to make smart
buying decisions. In addition to the programs and publications listed
below, check the links under Smart
Buying on
our web site. Also look into learning more about managing money in tough times from eXtension.
Another concern is when too much debt leaves little money to spend
on things we need or want. For more information about ways to manage
credit and reduce debt, check the frequently asked questions found on
our web site under Managing Credit or
under Reducing Debt.
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Programs:
Getting A Grip On Your Money
Making Money Work For You
Power Pay
Publications:
Developing A Spending/Savings Plan
Need More Money To Pay Bills? (Earned Income Credit)
Other Resources:
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