A lady budgeting

Make the Most of a Reduced Paycheck

Don't worry you will get through this!

Don't stress out!

Bubbles burst, the economy falters, companies downsize, and personal disasters happen which can result in a reduced paycheck. Perpetual salary growth or even maintenance is simply not guaranteed. However, by adopting the right tools and attitude, you can make the most of a reduced paycheck and not just survive, but thrive.

 

Determine whether your situation is temporary or permanent

If you fully expect to be back to your full salary soon, you may only have to adjust to lessened cash flow for a limited time. But before you tap into your reserves (and retirement savings, home equity, cash value life insurance, etc.) it would be wise to behave as if the salary reduction is long-term. Cut down on spending now. Securing your old income may take longer than you think.

If you do not expect to make as much money as you once did, you may be experiencing anxiety, which is normal. You may be panicking about the practical matters to contend with as well, such as how you will pay your bills. Adopting a systematic approach and devising a plan will help you manage the anxiety.

 

Recognize that your salary is not you

This is a deceptively obvious statement. Of course your salary is not you. But many people’s self esteem directly corresponds with how much money they make—the higher the income, the more important they feel. If your mood declines when your income drops, make every effort to dispel the attitude that financial wealth equals worth. It does not, nor does having an abundance of money guarantee happiness. Think back to when you were making more money then you do now. Were you genuinely happier, or did you just have the ability to buy more?

 

Seize the day

Hardship can hone skills and challenge entrenched ideas. Perhaps you worked in the high-tech field because the money was good, but that is not where your passion (or even perhaps talent) truly is. Consider this your opportunity to discover what you really want out of life. After all, if you are going to dedicate forty or more hours a week to your job, it should be something you love. Or at least like.

If you are currently unemployed or are working fewer hours, use this “extra” time wisely. Your options are as varied and abundant as your desires. Consider taking a class—one that will boost future earning potential or for pure pleasure. Write that book, paint the kitchen, start an exercise routine. Or just relax.

 

Analyze your expenses

When cash is copious, it is easy to spend arbitrarily. However, when the salary that sustained such a lifestyle is gone or drastically reduced, its time to take a good look at what you need to spend your money on, not what you can. Prioritize expenses now, and identify which bills take precedence. Mortgage versus car payment? Credit cards versus utilities? Analyze the ramifications of missing or not paying each. If you need help deciding, contact a financial counselor for help.

 

Develop a spending plan.

 

It will help you to discern between those expenses you can and cannot live without. If you find there is simply not enough money to support your necessities, much less your desires, at the very least you now know how much you will require from your next job. If expensive dinners are now a thing of the past, relish in the delights of a cheap pizza, or making cold cuts stretch with lots of lettuce. Enjoy and appreciate the things you may have begun to take for granted.

 

Remember: credit is not supplementary income

When money is tight, credit cards can take on an unusually seductive glow. However, a $40,000 line of credit is not a bonus in disguise, no matter how you much you wish it was. If you use credit to maintain the lifestyle you’ve grown accustomed to, it won’t be long before you “hit the wall”. Without an income to support repaying the balance in full every month, you’ll be paying in installments. Interest rates on unsecured credit is not cheap, and if you fall behind by 60 days, the rates will likely skyrocket. Late and over limit fees will add to an increasingly daunting balance. And soon you’ll be wishing you could return all the merchandise you bought and the meals you ate just so you don’t have to open another statement and look at those big, scary numbers. Credit cards are not designed to be emergency savings accounts.

 

Develop a plan

To thwart procrastination, write down what you want to achieve during this time. Be specific: include names of people you need to speak to and proposed accomplishment dates for each task. Update and refer to it regularly. Apathy’s enemy is a detailed and well-thought-out plan.

 

Go forward

Get professional assistance, talk to friends, and find others who are in like circumstances. It is too easy to think you are alone in this—support is key. Vent to those who can empathize; ask for help from those who can assist. Shock, shame, and anger are normal and feeling these emotions is expected. But by adopting a positive attitude and taking pragmatic steps, you can adapt to a reduced income, and achieve a financially stable future.

 

 

Blog Credit: https://www.balancepro.org/resources/articles/how-to-make-the-most-of-a-reduced-paycheck/


A couple purchasing a new car at a dealership

Tips to Save You Thousands on a New Car

Surviving the car dealership

Be Educated!

Whether you’re buying a new or used car, there are certain things to keep in mind when making a purchase. Unless you are a natural-born haggler, you might be a little uncomfortable or uneducated as to how to get the lowest price. A lower price means a lower monthly payment, and who doesn’t like saving money?

Research the Market Value

Just like any other purchase, you want to know what the vehicle is worth. There are many resources and websites available for consumers to check how much a car is realistically worth. Checking on this before going to the dealership will give you peace of mind knowing you’re getting a fair deal. You can assess the value of the car by going to sites like Kelley Blue Book or Edmunds. Both sites will help you find the average price per model in your area.

Don’t become too invested in the deal

You need to be ready to walk away from the deal if it’s not adding up. Make sure you keep a clear head and know when to say, “no thanks” and move on. Don’t get attached to a particular car, because in reality, there are thousands to choose from. Saying no and moving on may be a result of the dealer you are speaking to as well. Many are overly pushy and confusing, resulting in a bad customer experience. They may promise one thing, then turn around and take it back. Pay close attention to what they say and take notes if you have to. Auto Advisors are a great tool to use because they help people buy cars all the time. They know what to look out for and how to get the best deal.

Walk into the dealership knowing your out-of-door price

The out-of-door price is the price that you want to walk out with, which includes all fees, taxes, and other costs that you pay. Make sure this reflects the market value that you researched. Go into the dealership with a firm price and then talk the salesperson down. The salesperson wants to make a sale, so if you’re firm and don’t get too set on buying the car that same day, the salesperson will many times settle for your price.

Don’t get sucked into the extras

Here are some common add-ons that the dealership will try to get you to purchase to make it seem like you’re getting an added benefit.

  • Nitrogen in your tires – This is only useful for racing; otherwise, you likely will not notice a difference in your car’s performance or wear.
  • Theft Protection – These packages vary, but most new cars come with a built-in alarm system that will do the trick. There is no need for an advanced system.
  • Rear-seat Entertainment Systems – These are a complete waste of money. Ten years ago, it was a different story, but currently you can purchase a tablet for a fraction of what a rear-seat system would cost.

In conclusion, you need to be prepared and informed when purchasing a vehicle. Going to a dealership underprepared will most likely result in a poor deal that you walk away from unsatisfied. If haggling isn’t your thing, consider using an Auto Advisor. It’s their job to make sure you get the best price. They work with dealerships thousands of times a year, so dealers want to give them the best price possible in order to keep getting their business. You can learn more about our free auto advisors by clicking here.


Woman with money on desk

Your Stimulus Check and How to Use It

Suggestions on How to Manage the Money

Everything will be fine!

The government will be sending financial relief checks to millions of Americans. If you’re expecting to receive this relief, we want to help you with some ideas on how to manage that money.

Establish a plan and take care of your immediate needs

Before you spend any of the money, you need to make a plan and budget. Make sure you have food, rent, bills and any other necessities. These should be your biggest priority and are what many will be using the money for. Once your basic necessities are taken care of, you can allocate money to other things.

Pay off debt

This is a perfect time to pay off high interest credit cards or loans that are racking up your extra funds each month. The average American has $8,000 of credit card debt with an APR around 22%. Once you pay this off, or pay a portion of it, you will have more money for necessities when you’re not paying that high interest fee. If your debt is paid off and you have the ability to save this or put it into an interest-earning checking, savings, or money market account, you could get ahead on your savings goals. Whatever you decide to do, make sure you make a smart financial decision.

Add to or start an emergency fund

A good rule to follow is to have 6 months of expenses saved for. This fund should be easy to access and pull from when needed. For many people, this fund could be in use right now with times being as challenging as they are. For others, this would be a great time to add to it and to create an extra buffer for when things aren’t going as planned. The Coronavirus is a perfect example as to why this emergency fund is so important to have.

Help the community

If you’re fortunate enough and willing to, the community could use your help. There are many people that are struggling to buy supplies and stay afloat. Consider donating to trusted sources such as the World Health Organization, the American Red Cross, and various other nonprofits. You can also check with your local government to see if there are any nonprofits that are directly assisting your community.

We're in this together!

Everyone will have a different plan as to how they are going to use the relief deposits. Figure out what works best for your situation but make sure you stick to a budget. Along with being financially responsible, we need to remain positive and support our community. We are all in this together and will get come out of this stronger than ever!


Frustrated man with head on table and paper all around him

How to Survive a Layoff

Surviving a Layoff

Everything will be fine!

Surviving a layoff can be tough and demoralizing, but there are plenty of strategies to get you through it. Many times, layoffs can be caused by things that are out of your control such as recessions, mergers, budget cuts, etc. These are unfortunate circumstance but are many times completely unavoidable. The only thing you can do is pick yourself up and divert your focus to finding new opportunities. Listed below are 9 items that you should keep in mind when you’re laid off.

  1. Make sure you’re receiving everything that was promised to you. For example, if you’re promised a certain amount of paid vacation days and sick days, check your final paycheck to make sure it’s all there.
  2. Don’t panic! You may even want to take a few days off to relax and clear your mind before you make any decisions. Becoming overly panicked and worried will only stress you out more resulting in poor choices.
  3. Review your company’s policies. Figure out how to file for unemployment if that’s what you decide to do, and make sure to check how long your company-paid health insurance will be in effect. These are immensely important to understand incase there is an emergency.
  4. Make sure to look over your budget and make adjustments. There are many ways to cut costs when you really need to, so revisit and make changes to your monthly expenses. This might be as simple as cutting on grocery expenses. Click here for some tips on how to lower your monthly grocery expenses.
  5. Update your resume! You should continuously be updating your resume even when you’re employed, but make sure you have a current resume to give to prospective employers.
  6. Assess your goals. Are they the same as they were before you were laid off? If they aren’t, make sure your future plan is clear and attainable.
  7. Start applying for jobs! There are many online portals that you can use! For example, Indeed and LinkedIn are great tools that you can use to find jobs.
  8. Your family will always want the best for you. If your family sees you struggling and offers to help, swallow your pride and accept it! There is no shame in needing a little extra help when things go bad.
  9. Don’t get discouraged! It could take some time to find a new job, but you’ll eventually get that offer! Who knows, the layoff could lead to much bigger and better things.