NDSU Extension Service - Ramsey County


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Inbetween Here and There

Inbetween Here and There

          Losing your job or facing a drastic drop in income is one of the most stressful events a person can experience. Unemployment can mean sudden lifestyle changes for the entire family. Because there is less money to spend, you must decide how to spend what you have. Whatever changes unemployment brings, everyone feels the impact.

          When you are between jobs, the paychecks may stop coming, but the bills do not. When you do not have enough to cover your monthly expenses and pay creditors, you face some tough financial decisions.

          Concern about how to pay bills and meet day-to-day expenses can become overwhelming. You may be tempted to use credit cards, takeout a home equity loan or borrow money, but taking on more debt is generally not a good idea. Unless your situation turns around quickly, more debt usually creates bigger problems. 

          As an alternative to more debt, focus on cutting spending and working with creditors to reduce your payments until your situation improves. Act quickly to cut expenses and make a spending plan you can pay bills when they are due. Studies have found that many families do not adjust their lifestyle to cut spending until almost six months after their income drops. Those six months of extra spending can bring financial disaster.

          Taking one step at a time can include:

-         Talk with your family about the situation and set goals as a group so that everyone understand and supports the decision being made.

-         Review your income and expenses and balance them as much as possible.

-         Try not to use credit cards when unemployed.

-         If you think you may have difficulty with payments to creditors, talk to them right away. Have these conversations before you fall behind on payments.

-         If you are considering selling assets, delay as long as possible, especially those assets with tax consequences.



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