When Financial Pressures Occur, It’s Good To Have A Plan B…
The pandemic put a lot of financial pressure on many people. Although additional resources were available during this time, for many, it was not enough. Now, the bills are accumulating and the rent or mortgage payment is past due. There are several steps that can help you weather the storm and not go completely underwater.
Pay for Basics First
Even though your creditors are going to be applying pressure in various ways, you need to ensure that you have the basics for yourself and those who are dependent on you. No matter what, you need things like food, shelter (with utilities), and a means of transportation.
These things need to be your most important expenses. In some cases, it may mean moving to a new and cheaper location.
Rent and Mortgage Payments
To ease financial pressure, eviction moratoriums have been put in place. However, you should do all you can to pay at least part of your rent or mortgage. When the moratorium is ended, your lender will likely expect all back payments to be paid or at least know how soon you expect to get caught up.
Be sure to let your landlord or lender know your intentions and find out if there will be any fees involved. Always take notes on the conversation. When talking about a mortgage, be sure to get any new agreement in writing.
Reduce Your Monthly Expenditures
Look for those extra things that you pay for monthly or even daily that you could do without to save money. This includes services such as cable TV, gym memberships, buying expensive coffees, and eating out. It is much cheaper to eat home-cooked meals than it is at restaurants and fast-food places.
You can also sell a car that costs too much and get something more affordable – with cheaper insurance, too.
Have a Yard Sale
Sell what you can to make some money to put toward your debt. Find things that you are no longer using and have some value, and have a big yard sale.
Create a Budget
With limited income, you need to budget your money carefully and strictly. Eliminate all waste and start accounting for every penny. Calculate exactly what you need each month and stick to it.
Negotiate with Creditors
If your situation is expected to be temporary, contact each of your creditors and explain your situation to them. Right now a lot of people are feeling similar financial pressure and they know that people need time to get back on their feet financially.
By talking with your creditors, you may be able to make an agreement to temporarily suspend mortgage or rent payments. Credit card companies are often willing to lower payments for a few months if you can assure them you are trying to get back on your feet. Ask for an “accommodation” for your situation, which is a temporary change of terms.
The credit card issuer will determine what terms they can give you. Help may include letting you skip a couple of payments, skipping the interest, lowering payments, waiving late fees, etc.
This one could be a little tougher since most states will allow a car loan company to repossess your car immediately when you have a late payment. Most car loan lenders are more patient during the present pandemic, but you still want to contact them as soon as you know there is a problem.
Try to get them to change your schedule of car payments and be sure to get it in writing.