When Your Income Is Not Enough: Learn to track and prioritize

Unfortunately, many of us have been in a position of not having enough money to pay all of our bills in full and on time each month. Even if we have planned carefully, there may be situations where there is not enough money to pay bills. When your income is less than usual or you have had an unexpected expense, your regular bills and living expenses do not stop.

When you can see that you are coming up short to pay your bills and living expenses, there are a few things you can do. For some, balancing personal priorities and family expectations can sometimes be a challenge. If your work is seasonal or irregular, you may be able to cover everything when you are working, but struggle to cover expenses in the months or weeks when you are not working. 

The more you can prepare for your bills you know are coming, the better you can save for them. Having a plan in place for paying bills can make them easier to pay and help reduce stress. To help you gain a better understanding use the spending tracker, bill calendar, cutting expenses, and prioritizing bills strategies. 

Spending Tracker

  • Get a small container or envelope.  Every time you spend money, get a receipt and put it into the case or envelope.  If the receipt does not list what you purchased, take a second to write it on the receipt.  If you do not get a receipt, write down the amount of the purchase, what you purchased on a piece of paper, and add it to the stack. 
  • Analyze your spending. Go through your receipts and enter the total you spent in each category for each week. Add the weekly amounts per category. Once you get have totals, add them together to get your total spending for the month. 
  • Notice trends.  Circle items that are the same every month (rent, car, or cell phone payments). This will help you create your budget easier. Identify any areas you can eliminate or cut back on.

Bill Calendar

  • Gather all the bills you pay in one month or use the information from your spending tracker. 
  • Write down the date when you must send the payment or when the money must be taken out of your account, in advance of the due date. 
  • Write down the name of the company or person you owe the money to and the amount that’s due on the date the bill must be sent to arrive on time.

Cutting Expenses

These are a few suggestions to decrease spending. You can use coupons, switch to lower-fee or no-fee accounts at financial institutions, and bring lunch to work instead of buying it.

Prioritizing Bills

Identify what you need to pay to protect your housing and income, keep your insurance, and meet any court-ordered obligations.

For more about personal finance programs at UME, go to https://extension.umd.edu/programs/family-consumer-sciences/financial-wellness/personal-finance.

Check Your Credit

There are three national consumer reporting companies — Equifax, TransUnion, and Experian.  As a consumer, you must ensure the data about you maintained by consumer reporting companies is accurate and complete.

Due to the COVID-19 pandemic, the three national credit reporting companies are offering free weekly online credit reports through April 2022, and individuals can request free copies of those reports by going to https://www.annualcreditreport.com/index.action.  

Other companies collect your information and prepare consumer reports for other agencies.  As a consumer, you have the right to see those reports as well.

View the link https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/companies-list/ to see a list of consumer reporting companies. These companies use reports to inform decisions about providing you with credit, employment, residential rental housing, insurance, and other decision-making situations.  

Who can see your consumer reports?

Consumer reporting companies collect information and provide reports to other companies about you, but they must follow legal restrictions. Generally, they can provide consumer reports and risk scores to businesses such as: 

  • Debt buyers and collectors
  • Lenders (including those that offer credit cards, home, payday, personal, title, auto including auto leasing, student loans, and security deposit financing and lease guarantees on home rentals)
  • Insurance companies
  • Employers, volunteer organizations, and government agencies to determine eligibility for government assistance (employment screening)
  • Landlords and residential real estate management companies (tenant screening)
  • Banks, credit unions, payment process (check screening), and retail stores that accept personal checks
  • Companies that market and sell products and services specifically to lower-income consumers and subprime credit applicants 
  • Communications and utility companies
  • Retail stores for product return fraud and abuse screening; as well as retail store that offer financing, such as appliance and rent-to-own businesses
  • Gaming casinos that extend credit to consumers and/or accept personal checks

Check your reports before making financial decisions

If you are applying for a job, an insurance policy, or a lease, you should fact-check your background screening reports to ensure there are no errors. 

You have the right to dispute the information in your reports

If you find information in your consumer reports that you believe is inaccurate or incomplete, you have the legal right to dispute the report’s content with the consumer reporting company and the company that shared the information with the consumer reporting company, such as your lender. Under the FCRA (Fair Credit Reporting Act), companies must conduct, free of charge, a reasonable investigation of your dispute. 

To learn more about financial wellness programs at University of Maryland Extension, go to https://extension.umd.edu/programs/family-consumer-sciences/financial-wellness.

Steps to Creating a Cash Flow Budget in 2021 and Sticking to It!

When it comes to money, timing matters.  If the timing of your income does not match the timing of your expenses, you may come up short without advance planning.  A cash flow budget projects what money you expect to receive, how much you think you’ll spend each week, and when you expect the expenses to occur.  It’s different from a regular budget because it breaks your monthly budget down week by week.  It accounts for when money and other financial resources are expected and when they must be used on needs, wants, and obligations. 

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A cash flow budget can help you identify where you’re falling short each week.  It can help you figure out if you have the financial resources on hand to cover the most important expenses.  A cash flow budget can also help you target areas where you can cut back or postpone expenses. 

For people who have irregular, seasonal, or one-time income, a cash flow budget is even more important.  It can help you plan ways to spread the income you receive over future weeks or months when you don’t have money coming in.  Getting started can be the hardest part especially if your finances feel out of control, but these easy-to-follow steps are designed to help you create a cash flow budget that really works for you.  

Step 1: Where does my money come from? Are you self-employed, have multiple jobs, or receive child support or government benefits? These are all sources of income and can help you make ends meet.  As you receive income, keep track of it by using an Income and Benefits Tracker. Ideally, you should do this for an entire month.  https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_income_benefits_tool_2018-11_ADA.pdf

Step 2: Where does my money go? Use a Spending Tracker to log your expenses and get a realistic picture of what your money, on an average month, is spent.  A spending tracker helps you both log and sort spending by categories like utilities and housing to eating out and entertainment.  If you begin to feel overwhelmed, start small and look at your expenses one week at a time by either reviewing your receipts or checking your account.  https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_spending_tracker_2018-11_ADA.pdf

Step 3: Create a cash flow budget: This tool can help you bring your income and spending information together and show you how they interact with one another from week to week.  Use the Creating a Cash Flow Budget to help you remember when your bills are due but also, keep in mind weeks when you need to be careful about your spending.  https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_cash_flow_budget_tool_2018-11_ADA.pdf

Your cash flow budget is about setting targets for how and when you will spend your income going forward.  It’s important to be realistic when you set targets and focus on things you have control over to change. 

Build and keep a good credit score

Many people confuse credit scores with a credit report.  A credit score predicts how likely you are to pay back a loan on time.  Companies use a mathematical formula called a scoring model to create your credit score from the information in your credit report. These scores usually range from 300 to 850. Banks, credit card companies, and lenders may use different credit scores to make decisions about offering you credit. Two of the most commonly used credit scores are FICO (calculated using formulas from Fair Isaac Corporation) and VantageScore (calculated using formulas from VantageScore Solutions). FICO shares this information with the public about what goes into its scores. 

How are FICO Scores Calculated? | myFICO | myFICO

The payment history tracks whether you’re paying your bills on time. The amounts owed tracks what you owe, including debts that you are paying down over time.  The length of credit history tracks how long you’ve had credit accounts. The longer the history, the more positive effect on your scores. New credit is tracked by measuring the credit inquiries about you made by creditors and others.  Lastly, it’s considered a good thing to have a mix of credit, such as a mortgage, an auto loan, and not too many credit cards.  These are some guidelines that can help you build a strong credit score.  

  • Pay your loans on time, every time. One way to make sure your payments are on time is to set up automatic payments or set up electronic reminders. If you’ve missed payments, get current and stay current.
  • Don’t get close to your credit limit. Credit scoring models look at how close you are to being “maxed out,” keep your balances low compared to your total credit limit. If you close some credit card accounts and put most or all of your credit card balances onto one card, it may hurt your credit score if this means that you are using a high percentage of your total credit limit. Experts advise keeping your use of credit at no more than 30 percent of your total credit limit. Paying off the balance each month helps get you the best scores.
  • Long credit history will help your score. The more experience your credit report shows with paying your loans on time, the more information there is to determine whether you are a good credit recipient.
  • Only apply for credit that you need. Credit scoring formulas look at your recent credit activity as a signal of your need for credit. If you apply for a lot of credit over a short period of time, it may appear to lenders that your economic circumstances have changed negatively. 
  • Fact-check your credit reports. If you spot suspected errors, dispute them. If you have old credit card accounts you are not using, keep an eye on them to make sure that an identity thief is not using them.

Important information for student loan borrowers during COVID-19

The CARES Act provides automatic suspension of principal and interest payment on federally held student loans through September 30, 2020. An Executive Order directs the Department of Education to extend these benefits until December 31, 2020.

Important facts about student loans

Photo by Andrea Piacquadio on Pexels.com
  • The interest and monthly payments on federally held loans are suspended through September 30, 2020.  
  • Consumers do not need to contact their student loan servicer or take any action on federally held student loans.  
  • Make sure the servicer has up-to-date contact information and check your mail or email in order to receive any updates or information about your loans.
  • Suspended payments through September 30, 2020 will count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.  

How do I know if I qualify?

The student loan payment and interest suspension only applies to federal student loans held by the Department of Education. Some federal student loans under the Federal Family Education Loan (FFEL) Program are owned by commercial lenders and some Perkins Loans are held by the institution or school you attended. Your FFEL lender or school may choose to suspend interest and payments on a voluntary basis, but they are not required by law to do so.  If you need more information contact your servicer to find out if these options are available to you. Use the link https://studentaid.gov/manage-loans/repayment/servicers to see the list of federal student loan servicers. 

What should I do if I have federally-held student loans?

You don’t need to take any action.  From March 13 through September 30, 2020, the interest rate is set to 0% and payments are suspended for student loans owned by the federal government.  It is suggested, however, to make payments or continue making payments on your student loans, if you are financially able to do so.  Any payments you make after March 13 have been applied directly to principal. By doing this it will help pay off your loan faster.  

Student Loan Debt, Education, College

What should I do if my student loan is already in default? 

The CARES Act requires the Department of Education to stop the collection of defaulted federal student loans, including garnishment of wages and the offset of tax refunds and Social Security benefits, through September 30, 2020.  There is no additional action required from the consumer for federally owned loans. Contact your loan holder to find out about your options regarding other defaulted federal loans you may have. Use this link https://studentaid.gov/manage-loans/default/get-out to learn how to get out of default.   

What should I do if I have private student loans?

Many private lenders have already implemented forbearance options that allow borrowers to postpone monthly payments.  Some of the private lenders also are waiving late fees and will not file negative reports to consumer reporting agencies.  Additionally, private lenders also offer their own reduced payment options.  Contact your student loan servicer to find out what is available to you. 

Planning Your Finances for an Uncertain Future

Couple managing the debtCoronavirus has changed many people’s financial circumstances quickly. A loss of income can put your services, or even your home in jeopardy, but companies are working with customers right now to help ensure their well-being. 

Here are a few steps you can take if your income has decreased suddenly.  

Contact your lenders, loan servicers, and other creditors

If you are not able to pay your bills on time, check their websites to see if they have information that can help you. The Consumer Financial Protection Bureau and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs. If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders and servicers to let them know about your situation. Being behind on your payments can have a lasting impact on your credit. Credit card companies, banks, and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments. 

Male Shows Empty Pockets Moneyless ConceptWork with housing and credit counselors to understand your options

The U.S. Department of Housing and Urban Development (HUD) has approved housing counselors who can discuss options with you if you’re having trouble paying your mortgage loan or reverse mortgage loan.  

Contact your mortgage servicer if you are having trouble paying your mortgage

Reputable credit counseling organizations are generally nonprofit organizations that can advise you on your money and debts, and help you with a budget.  Some of the counselors are also able to negotiate with creditors.  

Trouble paying your student loans?

If your loan is held by the federal government, your loan payments are postponed with no interest until September 30, 2020.  For other kinds of student loans (such as a federal student loan held by a commercial lender or the institution you attend, or a private student loan held by a bank, credit union, school, or other private entity) contact your student loan servicer to find out more about your options. 

Flat lay of earning money conceptTrouble paying your credit cards?

Contact all credit card companies that you owe and let them know of your financial hardship and that you are unable to make a payment. Additionally, work with a reputable nonprofit credit counseling organization that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors.  

Stay on top of your credit reports

Due to COVID-19 pandemic, the three national credit reporting companies are offering free weekly online credit reports through April 2021.  Use the link  https://www.annualcreditreport.com/index.action to request your copies.  

Equally important, through December 31, 2026, all U.S. consumers can also get six free credit reports every 12 months from Equifax by establishing a “myEquifax” account online or by calling 866-349-5191. That is in addition to the one free Equifax report (plus your Experian and TransUnion reports) you can get from AnnualCreditReport.com.

Coronavirus Scams Targeting Older Americans

Scammers are taking advantage of the Coronavirus (COVID-19) pandemic to con and scam people into giving up their money. During this time, people 65 and older aren’t interacting with as many friends, neighbors, or senior service providers due to efforts to slow the spread of Covid-19, making it harder to prevent scams. Knowing about possible scams is a good first step toward preventing them.  

Here are a few coronavirus-specific scams to look out for:

Computer hacker and cyber crime

COVID-19 Vaccine, Cure, Air Filter, Testing Scams

The Federal Trade Commission warned the public about an increase in the number of scams related to vaccines, test kits, cures, treatments, and air filter systems designed to remove COVID-19 from the air in your home. There is no vaccine for this virus, and there is no cure.  Testing is available through your local and state governments, but these tests are not delivered to your house. If you receive a phone call, email, text message, or letter with claims to sell you any of these items, it’s a scam. 

Fake Charity Scams

A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real to get money from you.  Be careful about any charity calling you asking for donations. Do your research by visiting the website of the organization of your choice to make sure your money is going to the right place. 

“Person In Need” Scams

Elderly woman getting bad newsScammers could use the circumstances of the coronavirus to pose as a grandchild, relative, or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and ask you to send money. They may ask you to send cash by mail or buy gift cards. These scammers beg you to keep it a secret and act fast before you ask questions. Take a deep breath and get the facts. Don’t send money unless you’re sure it’s the real person who contacted you.  Hang up and call your grandchild or friend’s phone number to see if the story is real.  

Social Security Benefits Scams

While local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease Social Security benefit payments or Supplemental Security Income payments due to the current pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period.  

Bottom Line

Say NO if anyone contacts you and asks for your specific and private information by phone, in person, by text message, or email. Report scams to www.ftc.gov/complaint. The Eldercare Locator, a public service of the U.S. Administration on Aging, can connect older adults and their families to services, call 1-800-677-1116.

4 Strategies To Reach Savings Goals 

Saving money, improving your financial life, and building wealth all start when you set a goal and implement a plan to reach that goal. 


Make a Plan

Those with a savings plan are twice as likely to save successfully.  That is where America Saves can help. Savers are guided on how to reach savings and debt reduction goals when making a commitment to yourself to save with the America Saves Pledge. To learn more about how you can save and sign-up to take the pledge visit the America Saves website www.americasaves.org. Complete the Pledge and America Saves will send you short emails and text reminders, resources, and tips to keep you on track toward your savings goal.  

Save Automatically

Automatic savings means you have a process in place to save at regular intervals, whether that is monthly, weekly, or daily. You can instruct your employer to withdraw a certain amount from your paycheck each pay period and transfer it to a retirement or savings account (or both). You can also contact your bank or credit union to set up an automatic savings by transferring a fixed amount from your checking account into your savings account each month. Saving automatically becomes a part of your budget and acts as a safety net for unexpected situations and emergencies. 

Retirement Insurance Pension Saving Plan Benefits Travel ConceptPay Off High-Interest Debt

Paying down debt, especially loans or credit cards with high interest rates, can lead to extra money every month for saving. Prioritize paying debt with double-digit interest rates and increase your payments over the minimum due. For example, if you have a $3000 credit card balance at 19.8%, and you pay a minimum balance of 2%, it will take 39 years to pay off the loan and cost more than $10,000 in interest charges. 

Save for Retirement

Retirement savings is a top priority for many savers.  Saving now for retirement will ensure that you have enough money to enjoy a comfortable standard of living when you stop or reduce the number of hours you work. You may be able to save for retirement at your workplace through a 401(k) plan, which has many benefits including direct deposit from your paycheck. If your employer doesn’t offer a retirement plan, you can still save for retirement, by putting money in an Individual Retirement Account (IRA).