How UAW-GM Employees Can Manage Financial Effects of the Shutdown
- October 15, 2019
- By: Greenpath Financial Wellness
Featuring Kristen Holt, President & CEO
It’s day 29 since roughly 46,000 autoworkers across 55 facilities nationwide went on strike. While UAW leaders made advance bill payments to afford the $250 weekly salary for autoworkers on strike, strike pay was not made available until the 15th day of the strike. Union workers admit that this loss of income will be tough on affected families.
This situation sheds light on a critical reality — that 78 percent of American households are living paycheck-to-paycheck and find it more difficult to recover from an unexpected financial setback. The Federal Reserve Board has reported that 40 percent of Americans need help to cover a $400 emergency, which means that some UAW-GM autoworkers may have exhausted cash reserves.
If you are affected by the loss of your income, consider the following options:
• Apply for unemployment benefits.
Contact your state’s unemployment insurance program to file a claim.
• Reach out to all creditors before payments are missed.
The Office of Personnel Management has provided access to sample letters employees can use when communicating with creditors.
• Inquire about hardship options with loan providers and lessors, financial institutions and service providers.
Many banks may waive or refund overdraft, monthly service and late fees for mortgages and credit cards and may offer customers up to a two-month deferral for a nominal fee. If you have a vehicle loan or lease, you may have the option to extend the loan. Many creditors do not report a late payment on a credit report until a customer is more than 30 days behind.
• Pay your mortgage or rent first before paying unsecured debts.
GreenPath’s financial counselors often see people pay their credit cards in full and on time but pay their mortgage late. If you’ve had a loss of income here are the bills you should pay first.
• Consider the use of a food bank, free clinic or other assistance services where needed
Refer to your state’s Health & Human Services website for information on available food and medical assistance. Alternatively, dial 211 or visit 211.org for assistance with navigating available local resources. In Canada, visit 211.ca.
• Exercise caution when it comes to payday loans or other short-term “fixes,” especially from unfamiliar companies.
Unfortunately, some services take advantage of those in vulnerable situations and may come with high-interest rates or create more financial difficulty in the long-term.
There are some steps you can take to make it easier to weather an unexpected income loss:
• Investigate an income backup plan.
Substitute teaching or working for a ride-sharing service (e.g. Lyft or Uber) are a few options for earning supplemental income during unexpected shutdowns.
• Consider reducing personal expenses where possible.
Phone/cable carriers, for example, may extend billing due dates. You may want to explore ways to remove services on your cable/phone/Internet plan to lower your bill. Health clubs may temporarily freeze payments for you.
• Make a spending plan.
Behavioral economics research shows that when people are stressed, it is harder to make financial decisions for long-term health. Having a budget in place will help you feel more in control of your finances even during times of financial distress.
We Can Help You With Free Financial Coaching
GreenPath’s nonprofit team of HUD-Certified Housing Counselors and NFCC-certified credit counselors are here to help if you’ve had a loss of income. GreenPath offers judgment-free coaching and free advice to people facing debt and other financial issues.
Kristen Holt believes that financial wellness is a cornerstone for pursuing our dreams. An experienced leader of business, partnerships, human-centered design processes and collaborations, she inspires GreenPath to rise up as an extraordinary organization that places people at the center of everything we do. Read more about Kristen here.