Building sufficient savings through budgeting is the key ingredient in any plan to maintain financial stability following a reduction in income.
Deerfield Beach, FL (PRWEB) October 11, 2011
Debt Management Credit Counseling Corp. (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), has published free tips to help consumers prepare for a pay cut. Due to the recent state of our economy, many people have been confronted with an unpredictable loss of income as companies are forced to restructure their workforce and payroll. Layoffs, wage rate reductions and the elimination of overtime are all methods companies are continuing to use to balance their budgets. It is essential that consumers who face the possibility of such financial changes plan ahead, so they are prepared to deal with a lower income if it happens. To assist consumers in developing a plan, DMCC has created and published a free educational article titled How to Prepare for a Pay Cut.
Core to DMCC's recommendations is the need for consumers to create or update their household budget to make sure that a healthy savings plan is in place. Establishing a savings plan that provides the equivalent of at least 3 to 6 months of income is essential to making sure there are enough funds to cover basic monthly expenses during a period of unemployment or reduced income. DMCC also recommends budgeting to payoff any 401(k) loans that are outstanding, which will have to be repaid immediately if employment is terminated, utilizing employee health insurance benefits to take care of any necessary checkups and medical concerns while still covered, and reviewing cell phone and other service agreements for possible cost reductions. “It is wise for consumers to start thinking about the “what if” alternatives and plan for possible unemployment, a reduction in pay, loss of overtime or a potential pay freeze,” stated Jessica Stokes, Education and Research Coordinator for DMCC. “Building sufficient savings through budgeting is the key ingredient in any plan to maintain financial stability following a reduction in income.”
DMCC offers free budget counseling sessions for anyone who is interested in getting their finances organized; even if the chance of a reduction in income or unemployment is minimal. Establishing a budget is the first and most important step when confronted with an income reduction. DMCC’s certified credit counselors will help figure out what can be done to maximize an income and put funds away for savings. DMCC can also help answer questions regarding the repayment of debts on a lower income.
About Debt Management Credit Counseling Corp.
DMCC is a nonprofit 501(c)(3) public charity committed to educating consumers on financial issues and providing personal assistance to consumers overextended with debt. Education is provided free of charge to consumers via seminars, workshops, a proprietary financial literacy program, and a vast array of online and printed materials. Free personal counseling is provided to consumers to identify the best options for the repayment of their debt. Consumers interested in speaking with a DMCC certified credit counselor may call (866) 618-3328 or request help at dmcconline.org. DMCC is a HUD Approved Housing Counseling Agency, is approved by the U.S. Trustee to provide bankruptcy counseling and education, and has an A+ rating with the Better Business Bureau.