When Income Decreases, but the Bills Don't

Tips for Dealing With Unexpected Financial Crisis

Considering the unemployment rates these days, it's surprising how many families are ill prepared for a financial setback such as a layoff. As a nation, we're saving less than 1 percent of our income. In fact, we haven't saved less since the Great Depression.

Experts say that not having an adequate savings cushion is what sends many families into financial crisis. Layoffs, downsizing, "right" sizing and merger mania are all very real threats that catch many by surprise.

"We aren't preparing for the future, and this is a grave concern," says Rudy Cavazos, director of corporate and media relations for Money Management International (MMI). "One seemingly small setback is all it takes to send many families spinning out of control."

If you find yourself unprepared for a financial crisis, MMI offers these tips to help:

You must stop spending money on anything but the bare necessities. Consider selling assets to keep afloat. You will not get out of this problem by attempting to get more credit. If you know that the income interruption is only temporary, then a small loan to tide you over may be appropriate.

Want to see more?

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• Surviving the Slow Economy: Tips for Navigating Through Turbulent Financial Times
• Talk about it!