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What To Do When Your Income Drops 20051 Tough Times, Tough Choices What to Do When Your Income Drops.

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Presentation on theme: "What To Do When Your Income Drops 20051 Tough Times, Tough Choices What to Do When Your Income Drops."— Presentation transcript:

1 What To Do When Your Income Drops Tough Times, Tough Choices What to Do When Your Income Drops

2 What To Do When Your Income Drops OBJECTIVES To help consumers... Remain in financial control when income drops. Set priorities for spending. Deal proactively with credit issues. Inventory and identify resources.

3 What To Do When Your Income Drops LIFE CHALLENGES An unexpected reduction in income can be a traumatic experience, both financially and psychologically.

4 What To Do When Your Income Drops Income Changes are a Reality of Our Environment Don’t obsess over who’s to blame. Do deal constructively with the issues at hand.

5 What To Do When Your Income Drops KEY POINTS Assess your resources. Consider your expenses and obligations. Determine how you will manage your debt. Reorganize your spending. Communicate. Identify community resources.

6 What To Do When Your Income Drops KEY POINTS Assess your resources Remaining household income. Spouse income Children’s income Personal assets Savings Investments Possessions Non-financial resources Support of family and friends Talents and abilities Time

7 What To Do When Your Income Drops KEY POINTS Consider your expenses and obligations List expenses. Determine which expenses are fixed and which are flexible. Decide what you can reduce or eliminate.

8 What To Do When Your Income Drops KEY POINTS Determine how you will manage your debt. Make a debt repayment plan. Keep up monthly payments as much as possible. Contact creditors immediately to explain your situation. Make appointments to talk with creditors. Reduce payments on revolving charge accounts to the minimum amount.

9 What To Do When Your Income Drops KEY POINTS Determine how you will manage your debt. Priorities when you can’t pay everything… 1.Food and shelter 2.Maintenance of services--utilities, transportation, insurance 3.Credit cards and loans 4.Doctors, dentists, hospital, and retailers

10 What To Do When Your Income Drops KEY POINTS Determine how you will manage your debt. Consolidation loan? Debt management plan? Bankruptcy?

11 What To Do When Your Income Drops KEY POINTS Reorganize your spending. React IMMEDIATELY by cutting spending. Get the family to “buy in” to a frugal lifestyle. Delay all optional purchases.

12 What To Do When Your Income Drops Beware of little expenses: a small leak will sink a great ship. ~ Benjamin Franklin

13 What To Do When Your Income Drops KEY POINTS Communicate! Family & friends Creditors Employer

14 What To Do When Your Income Drops KEY POINTS Communicate! Communicate with children, too. Make a family plan of action. Use active listening. Avoid laying blame.

15 What To Do When Your Income Drops KEY POINTS Identify community resources Government Unemployment Public assistance Mental health services Reduced lunches Community Food pantries Church programs

16 What To Do When Your Income Drops Moving From the Crisis Mode… Remind yourself that you are not alone. Make a commitment to prevail. Be disciplined. Educate yourself.

17 What To Do When Your Income Drops REFERENCES Linda Kirk Fox, What To Do When Your Income Drops, University of Idaho Cooperative Extension System. Beverly Howell, When Your Income Drops, Mississippi State University Extension Service, National Consumer Law Center. “Sixteen Rules About Choosing Which Debts to Pay First,” from Surviving Debt, 3rd edition, Debra Pankow, What To Do When Your Income Drops, North Dakota State University Extension Service, Barbara R. Rowe and Denise Schroeder, When Your Income Drops: Fact Sheets, Purdue University Cooperative Extension Service, 2003.

18 What To Do When Your Income Drops Developed by… Anne R Sortor, PhD, Regional Program Leader, UT Extension- Western Region Dena Wise, PhD, Associate Professor, Family Economics, UT Extension.


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