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GreenPath Debt Solutions Provides To-Do List For Unemployed in 2011
Build a budget; reach out for free counseling

(FARMINGTON HILLS, MI – January 11, 2011) While there are indications of the economy starting to make a comeback, there are still many people out of work in the New Year, who may need direction and help with prioritizing their financial to-do list. Dorothy Barrick, GreenPath Debt Solutions general manager and financial counselor, has put together a list for those who find themselves unemployed in 2011.

“The first step is to build your budget,” said Barrick. “As simple as it sounds, it is imperative that you sit down and list what income is coming into the household, be it from a spouse, severance pay, or unemployment.”

Barrick said that once you determine what income is available the next steps include:

Subtract your priority expenses. List food, shelter, transportation costs (car payment, gas, bus fare, etc.), utilities, and secured loans (boat, camper, etc.). Pay these first and foremost.

Now start subtracting all non-necessities. These are expenses that you can live without for the time being, such as premium TV channels, Internet, second phone, etc.

“If there is a surplus, stick to the budget you have built,” said Barrick. “However, if you cannot afford to pay all of your necessary bills, it may be in your best interest to contact a non-profit credit counseling agency for free counseling. They can help you balance your budget and explore your options.” She went on to explain that GreenPath helps build budgets for all people, no matter how long they have been out of work. GreenPath is also a HUD-certified housing counseling agency that can help you explore options to possibly lower your mortgage payment.

Barrick continued with the list:

Determine what expenses can be eliminated. Have a family meeting. Make sure everyone understands that expenses need to be reduced until a new job is secured. Cut TV down to basic. Go to cell phone only and eliminate the landline. Pack school lunches. Sell the boat if you can live without it. This is not a “one size fits all” as each family has unique needs and wants.

Determine how much you have in savings. Determine the monthly shortfall in your budget. If you have $3,000 in a savings account and your budget is short $250 per month, your savings will run out in 12 months.

Prepare your income taxes right away. Take advantage of your time off and determine if you are entitled to a refund. The sooner you file, the sooner the check will be in your bank account.

Call your secured loan companies. These are your car, camper or boat loans. Tell them you lost your job and ask if they will allow you to put two months of payments at the back of the loan. Often they will charge the interest only or charge a small fee to do so. This will give your budget a couple months to find employment without falling delinquent.

Meet with a free HUD certified housing counselor to help you contact your mortgage servicer to see if you can make a smaller monthly payment, until a new job is secured.

Call your student loan servicers and explain that you have lost your job. They may offer to defer up to six months of payments as a hardship forbearance.

Determine how much you can afford to pay on your credit cards. How much does your budget allow you to pay on your credit cards each month?

Contact your credit card companies. Tell them you lost your job and ask if they will reduce the interest or lower the monthly payment. Be careful you do not commit to an amount you cannot afford. By doing so you are simply putting on a band-aid and not stopping the bleeding. GreenPath can also help you communicate with your creditors.

Consider dipping into retirement only as a last resort. This is your financial future and times may be even tougher when it is time to retire.