Financial Advice By: Carmen Wong Ulrich
Q: I recently became unemployed and am now receiving unemployment benefits from the state. How can I negotiate with my credit card holders an affordable APR% and is there anything else I can do to lower my other monthly bills such as rent/housing payments, utilities, car notes, etc?
A: Facing piles of bills when you have little or no money coming in can feel incredibly overwhelming. But you absolutely can do it! The secret to keeping your head above water is to take each piece of your financial life bit by bit. This helps to keep things from spiraling out of control and will set you right back up on your feet once you start working again.
First, let’s tackle that debt. Getting a lower APR (annual percentage rate) happens only with leverage—the leverage a great credit record as well as an ability to pay gets you. At this point, you may have little on your side to help get your rates down. However, it’s always good to talk to your credit card company to see what you can do to lower your payments before you fall behind. Call your lenders and let them know what you can pay every month. They may even be open to settling your balances for less than what you owe. Key here is to be proactive with each card to see where you stand. If you end up batting zero and your payments are still unmanageable, head ASAP to a non-profit credit counselor near you. You can find one at NFCC.org. It’s important to go with a non-profit counselor first. They do charge a small fee (from $20 to $50), but it’s for administrative costs. These counselors do not make a profit off of your tough situation. But they will give you solid guidance on how to manage these debts.
Next up is the biggest bill in almost all of our lives: Home. There is rarely a way to cut your mortgage payment, but if you’re a renter and have been a great tenant, you can approach your landlord to see if there’s anything you can do to possibly help with building maintenance to lower your rent. For example, offer to take out recyclables or trash, or do some landscaping in return for a cut in monthly rent.
Also, you’re right to be very mindful of all your other expenses such as groceries, gas and utilities. Go to the free site LowerMyBills.com to shop around for cheaper landline, cell phone, cable, and utility providers. If you have to drive, carpool as much as possible and use sites like GasBuddy.com to find the cheapest gas near you or along your commute. As for groceries, go crazy with coupons! Search not only coupon sites like Coupons.com, RedPlum.com, CouponCabin.com, but also manufacturer sites themselves. If you like a certain brand, do a search for that brand name plus “coupons” to be directed to the manufacturer’s site. And don’t forget promotional codes for both online and in-store shopping! Head to FatWallet.com and RetailMeNot.com to find codes that will save you even more. And with coupons in hand, then search for who is selling what you want for less at Pricegrabber.com.
And when you’re unemployed, you may want to stop going out or doing anything entertaining because you feel like you need to save money every day. But don’t isolate yourself because you’re short on funds. Reach out to your family and friends and make sure they know that you’re looking for work. They may help in the job search and be able to offer some much-needed personal support. Plus, you don’t need to spend much to enjoy yourself. Offer to host a pot-luck dinner, or if the weather is warm, meet in a local park for a pot-luck BBQ. Surround yourself with support and your head will stay well above water in more ways than one!
– About the writer: Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.”