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September 21, 2022

If U.S. economic news is keeping you up at night, you’re not alone. With inflation at a 40-year high (8.5% as of July 2022, after rising to 9.1% previously) and economists predicting a recession, many Americans are concerned about their financial well-being. Figuring out how to stretch your paycheck to cover the increased costs of food, vehicles, and energy are only the beginning.

An inability to make minimum required payments on credit cards, student loans, and other debts could set you up for a nightmare of mounting late fees and a poor credit score. Instead of tossing and turning another night, use these tips to create an action plan that could help you wake up to a brighter tomorrow.

Sort Your Bills

Gather paper account statements, email notifications, and other recent communications from billers. Write down the total amount you owe each biller and their due dates. Then sort them in order of due date, with past due items at the top of the list. When you have a clear picture of how much you owe, and to whom, you’re in a better position to regain control of your finances.

Create a Budget

If you don’t already have a household budget, it’s time to create one. Use online budgeting tools or pencil and paper to record how much money you have coming in versus how much you have going out each month.

Include the totals of paychecks, government assistance, and any other money sources under “Income,” and add each bill to the “Expense” column. Be sure to also include recurring monthly expenses, such as groceries, in your expenses. Then, subtract Expenses from Income to determine how much additional cash you need to cover your bills.

When you know how much extra cash you need to pay your bills, put together a plan to increase income, decrease expenses, or both.

Generate Additional Income

Non-traditional jobs can give you the flexibility needed to keep your existing job and earn additional money on the side. Even if you don’t think you have a unique talent to sell, it’s possible to generate income fast by helping others learn a new language, complete business-related tasks, or care for their home or pets.

Another way to increase cash flow is to sell items you no longer want or use. While this is a short-term fix, it can give you more time to find a permanent solution and prevent accounts from becoming delinquent.

Talk to Your Employer

Pad your paycheck by requesting more hours at work or by asking for a raise. Working a few additional hours for your employer might increase your take-home pay enough to ensure you can pay your bills in the short term. However, a long-term solution might involve asking for a wage increase.

If you’ve taken on more responsibility at work, helped the company achieve a financial goal, or haven’t received a pay increase in several years, consider making a case to your employer about why you deserve one. Securing a temporary or permanent bump in pay from your existing employer is often faster than trying to secure a new part-time job.

Apply for Hardship Repayment Assistance

A few phone calls might be all it takes to give your budget some breathing room. Contact billers and request information about their hardship payment programs. Some lenders, credit card companies, and utility providers let customers temporarily skip or reduce payments without penalty. Contact billers for qualification details.

Refinance or Consolidate Debt

Reduce the minimum required payments on your high-interest debts by refinancing them with a lower interest rate loan. While a refinance or debt consolidation doesn’t remove the repayment obligation, it can help reduce your monthly bills by lowering borrowing costs.

Plus, it’s possible to use loan funds to bring accounts current by paying them in full and repaying the debts using the new loan.

Access Government Resources

Local and state government programs exist to assist households struggling to make ends meet. Be prepared to provide documentation to qualify for utility and rent/mortgage assistance. Some Hawaii-based resources include:

Hawaii Financial Assistance

Maui Economic Opportunity, Inc.

State of Hawaii Department of Human Services

Rest easy when you have a plan to improve your financial situation. Let HawaiiUSA help you get back on track with free, confidential financial coaching. Together, we can set up a realistic budget, identify steps that could prevent home foreclosure, create an action plan to get out of debt, and more.