Managing Your Finances if You’ve Had a Change or Loss of Income

Posted by Members Choice Credit Union on November 27, 2020

Financial Education

For many Americans the idea of missing work because of an illness or a shutdown is financially daunting. Many people have felt the sudden and unexpected loss of income due to the coronavirus crisis. If you are experiencing the uncertainty of a change or interruption of income here are some steps to take that can help you stay as financially healthy as you develop a long term plan. 

Understand Your Current Financial Situation

Formulating an educated assessment of your finances is key to making the right financial decisions for your most essential needs after a loss or reduction of income. First, start by identifying all of your major monthly expenses and annual bills, such as insurance or property tax, for which you may need to save regularly. Review your living expenses and eliminate the things that can be put off until you find a steady source of income. Reduce expenses in the “essentials” category as much as you can. Then, sum up all of your expected income sources such as severance, unemployment or other payments. Use these amounts to create your budget to get a good understanding of your current financial situation.

If you have a hard time creating a budget, you can get some tips to get started in our free Debt Solutions Guide, who can help you prioritize your bills and develop a plan that works specifically for you.

Get Access to More Income

It is common to rely on emergency savings as your main source of income while you job hunt, but there may be other alternatives available for you to access more income to ensure that you can maintain the budget you developed after assessing your finances. 

Members Choice offers some options to help you access more income:

Low Rate Personal Loan

An unsecured personal loan can be used to consolidate and simplify any outstanding debt. With this loan option you can consolidate multiple types of debts into one without any balance transfer fees and potentially a lower APR* to help you save money. You can also take advantage of the option to skip your loan payments for the first 3 months*** as you sort out a long term financial plan. 

Getting a Credit Card with No Fees

Getting a Choice Rate Visa to use responsibly for essential purchases such as groceries or gas can be a short-term solution. The card does not have an annual fee and offers a 0% introductory APR* for the first 6 months so you don’t have to worry about paying interests until then, to help you make the most of your budget.

Using the Equity on Your Home or Auto

If a low-rate personal loan or credit card doesn’t cover all of your expenses, you may be able to tap into the equity already built on your home or auto to temporarily supplement your finances. A HomePlus Loan, for example, can provide a financial cushion of up to $30,000 in 24 hours**, by using the equity in your home to borrow against it with a low fixed interest rate and no closing fees. You also have the option to switch your current auto loan to a new one with Members Choice and use the equity you’ve built in your auto to borrow against it with the option of no payment for 90 days.

Accessing Your CD Funds Early

If you have a current CD with Members Choice, you can get early access to your funds without paying any early closeout penalty fees. You can use these funds to supplement your income and pay monthly bills and expenses. 

It’s important to know that you are not alone when it comes to facing unexpected changes in your income. Members Choice is here to help with options to make your money go further and to help you pay for your monthly and annual bills that just can’t wait.

To learn more about Members Choice and become a member visit mccu.com/join-now

 

* APR = Annual Percentage Rate. Introductory rate of 0% for 6 months on purchases and an introductory rate of 0% for 12 months on balance transfers from the date of account opening. After introductory period ends, the APR will be 6.75% (Choice Rate Visa) and up to 18.00% based on your creditworthiness, when you open your account. This APR will vary with the market based on the Prime Rate. Balance transfer must be initiated within the first 180 days of account opening in order to qualify for introductory rate. A balance transfer could take up to six weeks to appear on your new card, depending on your previous card issuer. Check your accounts to track progress, and make sure you continue to make at least the minimum payment on the card you transferred the balance from on time to avoid late fees.

** 24 hours is based on normal business hours. If application is received during business hours. Weekend applications get processed the following business day. Some variances may occur.

***Interest still accrues during this time