Tips for tough financial times

Open and empty women's wallet

When times are financially tough, you may be looking for money to pay for everyday expenses. Consider trying a few of these tips to help you get the cash you need.

Eliminate unnecessary expenses

Determine how much you’re spending in nonessential categories such as entertainment or eating out. Then look for ways to cut back. For example, cutting little expenses during the workweek can add up to a lot of savings. Bring coffee from home, rather than buying a $4 cup each day. You could save about $1,040 over the course of a year. Resist the $10 restaurant lunch twice a week and brown bag instead, and you will save $1,560 in a year.

You may also be able to reduce your financial hardship by cutting back on home entertainment extras like digital channels or cable TV. At $12 per month over 12 months, one digital channel subscription costs you about $144 per year. That cost may be more if you pay for cable TV, instead. Also, add in your internet subscription when calculating costs. You may be able to save even more by looking at your monthly cellphone bill. In 2018, the Bureau of Labor Statistics found that adults age 25 to 64 paid an average of $114 a month, or $1,368 a year, for cellphone service. Contact your carrier to see if you can get a better deal; if not, consider switching carriers.

Tap into your emergency fund

It’s OK to tap into your emergency fund when it is a true emergency and you need to make a mortgage or credit card payment. After all, that’s what it’s there for. Just be sure to replenish the fund when your finances improve. And never spend more from this fund than you absolutely must.

Refinance your car payment

Eliminating or reducing a high car payment can make an immediate positive impact to your budget. Refinancing your auto loan generally allows you to save money by getting a lower interest rate and/or a lower monthly payment on a new loan. The lower monthly payments allow you to free up money for other essentials.

Consider a personal loan

Avoid payday lenders! High interest rates and fees for these types of loans can really add up. You might even find the amount you’re paying in fees and interest is greater than the amount of the loan. Instead, consider applying for a Salary Advance Loan or a Signature Personal Loan to help you with the extra spending power you need.

Avoid tapping into your retirement account

Unless you’ve exhausted all other resources, don’t borrow from your retirement accounts. Times may be tough, but it’s important to continue funding your retirement. If you borrow money from your retirement accounts, you may owe taxes on your withdrawal. If you’re under age 59½, you may also have to pay a 10% penalty. Roth IRA rules are less stringent, but keep in mind that everything you spend now means less money available when you retire.

Make a plan

After you’ve reviewed your budget and you’re still facing financial difficulty, use this fillable worksheet to help you figure out which bills to pay now and which you may need to ask your creditors about payment arrangements. Finally, you can get more details about no-cost financial counseling available to members by logging in to Member Connect and sending a secure message to a Credit Union representative.

The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.

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