Many families are facing economic hardship from being laid off, suffering a job loss, shortened hours per week, and other reductions driven by a weak economy. With a high level of debt and low level of savings, families can find themselves in difficult situations.
It is hard on families and individuals who have had a traumatic economic change. Reconciling to this new reality isn’t easy, requiring communication, soul searching, and belt-tightening. Tips from a publication written by Suzanne Badenhop, retired University of Kentucky Cooperative Extension Family Resource Management Specialist, will help you and your family survive a reduced economic situation.
• Communicate with family and loved ones. Sit down with your family to both explain what has happened and to listen to their ideas and points of view. A family council will help everyone understand the gravity of the new situation, and listening to your spouse and children may generate new ideas on how to proceed. They may have ideas you have not yet thought of.
• Apply for unemployment. Collect the necessary information and go to your local unemployment office without delay. Apply immediately so you start receiving benefits as soon as possible.
• Assess your income level and outgoing money flow. Use a two-week chart if you don’t currently track expenses. This exercise helps determine essentials from non-essentials. This is critical since you will have to make adjustments to your standard of living.
• Reduce living expenses and cut unnecessary spending. Eliminate non-essentials, such as eating out, buying new clothes, and even using cable TV, may from your budget. The two-week tracking exercise will help you determine other unnecessary expenditures.
• Write a plan for how you will pay creditors. Be frank with them about your situation. Creditors may be able to work with you either by reducing monthly payments, allowing you to enter hardship programs, or by reducing interest levels for a period of time.
• Insurance/Cobra. Use this opportunity to examine your current insurance expenditures and make changes to reduce costs while preserving the right level of protection.
• Talk to banks/mortgage companies. Can you reduce your monthly mortgage payment with refinancing? Are you eligible for any bridge loans?
• Find ways to create additional income. Explore part-time jobs, working from home, and other means at your disposal to create income.
• Turn to social agencies. Contact your local office for the Kentucky Cabinet for Health and Family Services, which offer programs such as Supplemental Nutrition Assistance Program (SNAP) and Medicaid to help families in need.
• Take advantage of other school system’s summer feeding program, school free summer camp, numerous library programs for youth and adults, activities like the All-Star Dads and Longest Day of Play, Kids College and 4-H Camp. Many programs that charge offer scholarships for children who cannot afford the full fee.
Above all, don’t blame yourself and don’t ignore your bills. By communicating with lenders, banks, and family, you will have a more positive outlook and a more realistic idea of what you need to do each month to survive.