Your phone rings in the middle of a typical routine day. You click to answer, and the voice on the other line delivers a message that spins your life into a completely different reality. So, what do YOU do when you are smacked from your blindside? Try these four steps if the unexpected circumstance negatively affects your income or your expenses.
1st- Don't panic.
Take deep breaths, pray and put together a plan. A clear mind and a hopeful heart will help you create a sound strategy. Where do you need to be? What products and services does your family absolutely NEED?
2nd- Restructure your budget to have money left over each month to put into savings and for emergencies.
If you need to lower overall payments with creditors, call them to see if you can get the interest rate or minimum payments reduced.
Can you pick up an extra-paying job? Can you rent out part of your home to increase income?
Sell stuff like at a garage sale. Can you switch out one expense for one that gives you the same benefit but at a lesser cost? Can you split the cost of some products or services with someone else who can use it?
3rd- Work on your credit
The higher your credit score, the lower the interest rate you enjoy when you borrow money. An excellent credit score is 780-850. A good score is 700-779. An average score is 660- 679. Scores in the 600's will not get you the best pricing when you borrow money.
Check www.annualcreditreport.com to make sure there are no errors on your credit report. When you find errors, work with your creditors and the three credit bureaus to complete corrections.
Settle and satisfy any past due or delinquent accounts. Consider waiting until you have spoken with a mortgage officer and gotten preapproved for your financing before paying off delinquent accounts since paying off a derogatory bill can cause your credit score to go down before the score goes back up.
Never let your balances owed on each credit card show over 30% balance/credit line.
Stay away from 12-months-same-as-cash.
4th Use available resources provided by the government, your community, a non-profit agency, or friends and family. Free legal services. S.C.O.R.E. Senior Corps of Retired Executives gives free help to small business owners.
