Weathering a Financial Storm

Weathering a Financial Storm

Millions of Americans face financial problems that can start with the loss of a job, a death or illness in the family, a divorce or separation, or a slowing economy.

Here are warning signs of a financial problem:

  • More than 20 percent of your monthly net income is going to pay credit cards and other loans (excluding a mortgage)
  • Borrowing money to make payments on loans you already have
  • You are frequently at, near or over the limit on your credit cards
  • Only paying the minimum required on your credit card bill or paying bills late

What can you do to protect yourself and your family if you’re having financial troubles?

Beware of scams

  • Con artists are always around, but they are especially dangerous during uncertain times. People who are worried about money are more likely to be taken in by attractive-sounding financial offers that are in fact frauds.
    • Financial frauds that flourish during tough economic times include bogus offers of “easy credit” and “guaranteed loans” from swindlers who collect money upfront.
    • Remember that a bad credit history can only be repaired by steady and consistent on-time payments, so any promises to erase a bad credit history for a fee are scams.

Review your spending

  • Your family’s welfare comes first, so continue the payments on your home, utilities and insurance.
  • Consider cutting back on expenses you really don’t need or use.

Be smart about borrowing

  • Interest payments on credit cards and other loans are an expense, so think about keeping these costs and other borrowing costs down.
  • Among the strategies to consider:
    • Pay off your highest-rate loans (usually your credit card or department store charge card) first.
      • If you have several credit cards, target the one with the highest interest rate, pay it off, and then move to the card with the next highest rate.
    • Also, try to pay all or as much as possible of your credit card bill each month, so you can avoid high interest charges. But if all you can manage is to send in the minimum payment, make this a priority


From FDC 2018 summer newsletter, 25 Years of Tips You Can Bank On.