By Michael Hall
As we get accustomed to the “new normal” we need to focus on adjusting our budget. If you are able to work from home, you are probably saving on transportation costs, but you might need to buy a computer. If you are an essential worker, your transportation costs may have increased. If you have lost your job, you need to cut back, preserve what you have and speak with a jobs counselor.
- Everyone needs to sit down and review their income and expenses, to have a clear and detailed understanding of what you have to work with. It is recommended that everyone reduce all non-essential items and focus on your primary needs: shelter, food, utilities and basic hygiene. Look at the timing of your cash flow so you will not be caught short. All additional funds should be put away in savings.
- Once you’ve examined your budget, you have to contact your creditors. While it may cause anxiety, it is important to look at your bills and evaluate what you can and cannot pay. Contact your creditors before your next payment is due. Prepare for the conversation with a clear understanding of your goal, which you should know, based on your budget. Plan to explain your situation and if you know when you can return to normal payments, let them know. If you have a long history with the creditor, or generally make on time payments, this is the time to mention it.
- Many companies have announced they will reduce minimum payment amounts, reduce interest and increase spending limits. It doesn’t hurt to ask for all of these supports but do so one at a time. Be realistic and commit to payment terms you can fulfill. A small payment helps extend good will.
- If you are able to negotiate new terms, take notes on the conversation, get the name, number and email of the person you speak with and follow up with an email that confirms the payment plan. If you are unable to make any payment and need to request “forbearance” for certain payments, keep track of what you owe, as they will demand the payment at some point. Once you’re able to resume payments be sure to negotiate the most favorable and realistic payment plan. Financial counselors have expertise in guiding you through this process.
Michael Hall is a financial counselor with Bedford Stuyvesant Restoration Corporation. As a financial counselor he helps individuals allocate their funds better, deal with debt, weigh in on legal options, and even save for a rainy day. To make an appointment with Financial Counselor, Michael Hall call 311 or visit the website: https://www1.nyc.gov/site/dca/consumers/get-free-financial-counseling.page