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Annuit Coeptis

Getting By in Uncertain Times: Freeing Up Money From Services

Household bills come monthly.

Household bills come monthly.

There are so many things we have no control over.  Case in point: unpaid and furloughed federal workers are coming up on missing a second paycheck disbursement.  For most, household bills come due monthly.  When the monthly budget experiences a fifty per cent cut of expected income and yet one hundred per cent of the outflow is needed to keep things in the black, a spiral can ensue.  Times like these require creative and/or temporary solutions.  Here are a few ways you can take action.

Communicate

Some communities, municipalities, and utilities have already put into place measures that will extend grace periods for unpaid bills for furloughed federal employees.  Naturally your power or water provider has no way of knowing you have been affected by the government shutdown, so the onus falls upon you to place a phone call to your provider.  Explain your situation and ask if a plan has been put into place for you and others like you who are not receiving a paycheck.  If a plan is not in place, suggest they consider doing just that.

In the meantime, ask them if they will kindly extend your due date. Assure them your intention is to pay your bills as soon as you have begun to collect your post-dated wages.  Another consideration is to ask your service provider if your monthly bill can be based on an average of the previous year’s bill amounts.  This may offset those higher-than-usual-usage months.  This can be a short term but timely fix, especially if utility costs are rising.

Banking and Paying Bills

Consider online bill-pay because it streamlines the process and reduces costs associated with postage fees.  In some cases, other fees associated with bill-paying might be waived.

At ALL costs, avoid using payday loans, cash advance, or title loans; these alternative ‘services’ charge substantial fees and can cost you more than any convenience they can EVER provide.  As a matter of fact, 99% of pay day loans are repeat users because that is the way their business model is set up.  When a borrower has to keep reapplying for more money to repay the original short term loan, the cost of doing business rapidly climbs upwards toward an APR of more than 300%.  Yes, you read that right!  As if the corner brick and mortar operation isn’t bad enough, internet pay day loans are even worse.  Take a closer look here: https://www.ncdoj.gov/Consumer/Credit-and-Debt/Payday-Loans.aspx

Credit Cards
Don't use credit to pay bills.

Resist the temptation to pays bills with credit cards.

These are trying times indeed and the temptation to take out cash advances on credit cards to put food on the table and cover the monthly bills is real.  Keep in mind those fees and interest rates can put you in a deeper bind after your paychecks begin again to flow regularly.  In other words, remember you are still limited by your income, so added encumbrance only means your monthly outflow will have increased significantly while your income remained the same, leaving less funds available for unexpected expenses.  But when it comes to credit cards, there are two things you can do to help your situation.  Call each credit card issuer and ask them if they can reduce your current interest rate.  If you have paid in a timely fashion for the past twelve months, there is a strong possibility they will be able to do this for you.

This may sound like a small thing but it is empowering and after all, who knew you could even do this?  Go ahead a try it!  The second thing to do is ask if you qualify for a longer grace period or if they will push out your due date.  Be sure to tell them your circumstances.  Who knows, they may have already set a policy into play for borrowers in your situation.

The Best Defense is a Good Offense

Was it Grandma or Grandpa who used to always say, “You never know until you ask.”  Or “What do you have to lose by asking?”  The take away here is to be proactive.  Communicate with your service providers and lenders.  Make them aware that your intentions are good and it’s only the government shutdown that stands in the way of you managing your responsibilities the way you have done in the past.