Sequestration is now in place, and
along with it came a good amount of uncertainty, causing many Americans
to wonder how they will be
impacted. By some estimates, more than one million employees of
federal agencies may receive furlough notices. Locally, 3500 civilian employees of the Tobyhanna Army
Depot started an 11-day non-consecutive furlough that will last through
September. And that’s just from one major employer in the area feeling
the impact of sequestration.
Some workers are not adequately prepared to deal with a loss of income, even a short-term one. For those living
from paycheck to paycheck or
without significant savings, any income interruption is likely to put them over the financial edge.
For example, consider the statistics below from the National Foundation for
Credit Counseling (NFCC), Financial Literacy Survey:
Thirty-three percent of respondents admit to not paying all bills on time;
Thirty-nine percent have zero non-retirement savings;
Thirty-nine percent carry debt over from month to month, and
Sixteen percent have utilized overdraft protection in the last 12 months.
“Even if a person does not anticipate being impacted by sequestration, now is
a good time for a comprehensive financial review,” said Terri Stocki, spokesperson
for CCCS. “Whether due
to an unplanned expense or a job loss, no one has ever regretted being financially
prepared, and preparation starts with understanding where you stand today.”
CCCS advises consumers to take the following steps to put themselves in
a better financial position, regardless of what the coming months
Assess current financial
situation –The NFCC’s free financial self-assessment tool, MyMoneyCheckUp
™, is a good place to start. The tool provides consumers
with a means of evaluating four key areas of personal finance: budgeting
and credit management, saving and investing, planning for
retirement, and home equity. After answering a series of topic specific
questions, a personalized assessment of the individual’s overall financial
health and associated behaviors is generated. With areas of
concern identified, the analysis suggests changes that consumers are
encouraged to implement in order to become more financially independent.
The traditional green, yellow and red traffic light colors signal
whether the consumer should continue on their current money path,
proceed with caution, or stop and make a change. Individuals can also complete an optional budget to further
help them assess their financial health. The tool is available in English
at www.MyMoneyCheckUp.org and in Spanish at https://www.miayudafinanciera.org.
Face the financial facts – After completing the financial discovery step,
consumers may find the results surprising. Don’t ignore them.
Financial problems rarely resolve themselves, particularly in emergency
situations. Take action sooner rather than later, as delaying only
makes the problem harder to resolve.
Take control –Admittedly, some things are beyond a person’s financial control,
but some aren’t. Control what you can by doing the following:
Review your credit report and score, both necessary to fully understand
the current financial situation, and provide a framework for
Create a cash-flow calendar listing all sources of income. Next, plug in the dates all bills are due. This will ensure
that bills are paid on time and protect the credit report and score from
future damage. Commit to paying down debt, and if
necessary, suspend all charging, consistently moving toward solid financial
Reach out to a legitimate credit counseling
agency for help creating a survival plan.
“If there is a quick resolution to the sequestration, nothing has been lost by implementing the above steps,”
continued Stocki. “If not, consumers will be better prepared to
face whatever comes their way financially.”
To locate the CCCS Agency closest to you, dial (800) 922-9537, or go online
to www.cccsnepa.org. For help
in Spanish call (800) 682-9832.