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Four Ways to Handle a Financial Setback
Tough economic times are hitting people with furloughs, pay cuts and layoffs. With budgeting and spending alternatives, you can make ends meet during challenging times. These tips also can help you save for the future expenses and emergencies.
Review your monthly expenses and prioritize them. Decide what you need to pay for and what you can, temporarily, let go. Housing, food, transportation and insurance should take top priority. Dining out, clothes and entertainment may need to be sacrificed for the time being. Calculate the amount of money you are lacking each month, and be sure to live within your means. Monthly Budget Worksheet »
Determine if an item you need to buy is a want or a need. Ask yourself if you really need it. If the answer is yes, can it wait awhile, or can you get it less somewhere else? Consider alternatives to buying like community Freecycle groups (freecycle.com), craigslist.org or kijiji.com, in addition to garage and estate sales. Look for retail items on sale, and also consider borrowing items from friends such as power tools. Your local library is also a great resource for free entertainment like books and movies.
If you are unable to pay your bills, contact your creditors immediately. Paying your bills on time is the most important factor in your credit score, making up 35% of your total score. You may be eligible for special programs that will keep your accounts in good standing. Be sure to make the minimum monthly payment on your credit card. If you have loans with UW Credit Union, contact us as soon as possible by calling 608-232-5000 or 800-533-6773, ext. 2828. We will work with you to help determine what's best for your situation.
Plan ahead. When you're back on your feet, resist the urge to spend your income each month. Once you know how much you will need to save, have that sum deducted monthly from your checking account and deposited into a savings account. It's ideal to have 3-6 months worth of living expenses in your emergency fund.
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