Finance Globe

U.S. financial and economic topics from several finance writers.
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7 Ways to Handle a Delay in Pay


Temporary layoffs can happen when you least expect and with no warning from your employer. Worse, you may not know how long the layoff will last and when your pay will start again. Staying on top of your finances can be difficult when there’s a delay in your pay. Here are some tips for staying on track until the layoff is over.

Take advantage of your emergency fund. A delay in pay is the exact kind of situation that you build an emergency fund for. Your emergency fund isn’t a free-for-all. It’s still important that you preserve it as long as possible, especially if you don’t know when you’re going to get paid again. Pull the minimum amount necessary from your emergency fund to keep from running out of money too soon.

Call your lenders. Many lenders offer hardship payments designed to help borrowers who are having financial issues. Your mortgage or student loan lender, for example, may be able to offer you forbearance or deferment. These options lower or eliminate your monthly payment for several months. Keep in mind that unpaid interest may be added to your balance increasing the amount you owe and pushing your payoff date further into the future.

Contact your credit card issuers. Like your lenders, credit card issuers may offer a payment plan that will lower your minimum payment or reduce your interest rate until you’re able to pick up your payments again. You may lose your purchasing privileges while you’re on a payment plan, which means you won’t be able to rely on your credit card to make ends meet.

Cut back on spending. Until you start receiving your regular pay again, it’s a good idea to reduce your expenses as much as possible. It will be hard to get rid of essential bills, but you non-essential spending on the chopping block. Look to things like streaming subscriptions, cable television, dining out, and extra grooming.

Make some extra money. While you’re paying for your pay to start again, look for some ways to bring in extra cash. It will keep you from relying heavily on your savings and allow you to live more comfortably. Consider holding a yard sale or selling things online. You can make money from a hobby or pick up odd jobs here and there to bring in a few extra bucks each day.

Don’t rack up extra debt. While it’s easy to turn to credit cards or short-term borrowing when you’re having financial difficulty, borrowing money can hurt you more in the long run. Your credit card minimum payments go up as your balance goes up which puts a strain on your monthly spending. Short-term loans, like payday loans, are difficult to catch up on and can get you caught up in a cycle of debt. Making extra money and pulling from savings are the best options for making ends meet while you’re experiencing a loss of income.

Try to stay current on payments. While it’s difficult to keep up with all your spending, try to make your payments on time each month, especially larger payments like your rent and mortgage. Your larger bills may have higher late fees and are harder to catch up on than smaller bills. Consider also the impact that late payments will have on your credit score and future ability to borrow money in the future. If you fear you may be late on payments, contact your creditors to see if you can change your due date so you can avoid a late fee.

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Comments 1

Frank on Tuesday, 29 January 2019 16:29

This is great information especially what is going on right now. I hope government employees get paid immediately.

This is great information especially what is going on right now. I hope government employees get paid immediately.
Saturday, 04 February 2023

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