for a Financial Setback
on less is never easy, but with a little planning and a positive
attitude, you should be able to weather most financial storms.
So, take a deep breath, relax, and review the following tips that
you can help make any setback smooth and (almost) painless.
is the time to take stock of what you can do to avoid being
hit with a financial shock later. Avoid the urge to procrastinate
- Mark on your calendar the date that you will have to live
a tax refund? If so, beat the rush and file your taxes as soon
as possible so you don't have to wait for much needed cash.
money aside in a special "piggy bank" or savings account
for the occasion.
thinking about generating money by selling an asset. This can
include anything from having a garage sale to selling stock
(just beware of capital gains taxes for next year).
planning begins and ends with a realistic budget. If you haven't
reviewed your goals, assets, income, expenses, and debt in a
while (or ever) now is the time to do it. Sit down and do the
numbers crunch. It is worth the effort.
you have an accurate idea of where your money is going each
month, take a good, hard look at it. Are there areas you can
reduce or eliminate? Just how important is the $4 morning muffin
and coffee? Five times per week will run you $80 a month. This
is your opportunity to analyze when and how you spend your money
- and make positive decisions about what you may want to change.
your expenses. It's a great habit to get into, and you may be
able to prevent "money leakage" - the fast cash $40
that seems to evaporate before you leave the ATM machine. By
plugging the holes now, you can save more efficiently for the
times when you will really need it.
savings are for times like this. If you have saved some money,
pat yourself on the back - you deserve it. Take out only what
you need and spend prudently.
you do not have a savings account to fall back on, don't despair.
However, this is a good example of a situation where an emergency
savings would be helpful, and may be the perfect motivation
to start one. Ask your employer to have money deducted from
your paycheck and deposited into a savings account. Three to
six months of accessible expenses in a liquid account is standard.
every purchase - Do you need it? Do you need it now? Can you
get it for less somewhere else? Asking yourself these questions
will help you become a savvy shopper in both flush and tough
in bulk - but only if you can afford it. It doesn't make sense
to buy a 50 pound bag of cat food, even if it is a great deal,
if you really only have enough for a box that will last the
there is a farmers market in your area, you can take advantage
of the freshest produce for "dirt" cheap prices.
coupons to save on food costs. But beware - you may be lured
into buying something you would never otherwise purchase simply
because it seems like such a bargain. Do you really need four
packs of triple A batteries, or orange-confetti cake frosting?
entertainment costs by renting videos rather than going to the
movies. Or take advantage of the movies available on the cable
or satellite you already pay for.
at home rather than going to restaurants - even fast food is
often more expensive than a home cooked meal. If you do go out,
try eating at cheaper restaurants or take food out rather than
eating in the restaurant to save on tips and drinks.
on supplies - use sponges rather than paper towels, a multi-purpose
cleaner instead of several specialized ones, and recycle newspapers,
bottles and cans. You will help save the earth while saving
you find you can't pay your bills, contact your creditors and
explain your predicament - you may be able to avoid a late payment
fee, particularly if your payment history has been consistent.
A phone call is good, but a letter is better, as you will have
tangible evidence of your efforts. Keep copies of all correspondence
and maintain a log of telephone communications, complete with
a representative's name and time of call.
you have credit card debt, pull out your most recent statements
and check your present annual percentage rates. Are they higher
than you remembered? Or simply too high for you to be comfortable
with? If so, it may be time to make some changes:
Give your current creditors a chance. If you have been a
good customer, remind them of it, and ask for an interest
rate reduction. A five-minute phone call can make for huge
transferring your balances to low interest cards or those
with extremely low "teaser" rates. Be sure to
evaluate the transfer offers carefully though - How long
does the offer last? Is the APR 5.9% or 5.9% plus the prime
rate of interest? How long is the grace period - you may
not want to go from a 30 day grace to a 20 day grace. What
is the punitive interest rate for late payments? They can
be as high as 36% -- quite a jump from the original offer.
card debt is expensive. And frustrating. If you feel you have
been treading water or watching the balance grow rather than
plunge, go back to your budget and consider making changes.
A $2,000 balance with a 19% interest rate will take 30 years
to repay if you just make the minimum payment - and that's if
you never make another purchase on it!
consolidation may be an option. A Debt Management Plan is designed
to help consumers repay their debt in three to five years by
offering interest rate reductions (depending on the creditor),
one monthly payment, and a commitment from you to not get into
remember that planning ahead is key to being prepared for tomorrow.