ISU Extension has tools to help you plan your finances
The current period of job loss and reduced income has affected people in different ways. The result? Different households face different financial challenges at this point.
Whatever your situation, now is a good time to assess your financial situation, evaluate your priorities, and take steps to improve your situation as necessary. Your local ISU Extension financial educator is available to work with you — at the end of this article I’ll share how to contact me and my colleagues.
1) Some of you have been living with seriously reduced income — and still are. Your task has been to find every possible way to reduce your expenses and/or find new income and make use of new resources, including public assistance if you qualify. You must communicate with all of your creditors, but avoid making promises you cannot keep. If returning to something like normal looks unlikely, you may need to consider major lifestyle changes.
2) Some of you lost income for a while, but are now back to an income you can live on. It is likely that you got behind on bills, built up credit card debt, and/or depleted your savings during your crisis. Strong focus on repaying those debts and building up emergency savings will get you ready in case of an unexpected expense or another loss of income. Careful examination of your spending choices will help you regain equilibrium and then build a strong cushion.
3) Others of you have maintained stable income, but have realized that if you did lose income, you would be in a very difficult spot. Facing the reality that you lack basic financial security can motivate you to build up savings and pay down debt. Start by cutting your living expenses so that your regular monthly expenses are 10-25% less than your income. Putting the extra funds toward savings and expedited debt payment will build you a cushion that will bring peace of mind and make your life easier if/when hardship strikes.
4) Still others have stable income, and have felt secure that even if you did have a cutback, you would be okay. In your case there is no obvious need for change, but it’s wise to maintain control of your finances through good planning. You may wish to build an even stronger savings cushion, after seeing others struggle with lost income for six months or longer. As you build savings, seek out accounts that pay slightly higher interest while still providing ready access to your funds.
As you consider your current financial situation, you may wonder what steps can move you in the direction you want to go. ISU Extension and Outreach financial educators are available for individual consultations to assist with identifying possible strategies and with trouble-shooting. My colleagues and I will not tell you what to do, but we do have research-based tools that may be useful. For a statewide listing of financial specialists, go to https://www.extension.iastate.edu/humansciences/finance.
Contact Wollan through your local office of ISU Extension and Outreach (Webster County: 515-576-2119 or www.extension.iastate.edu/webster) or directly (515-832-9597 or firstname.lastname@example.org).