I didn't know how to react to this. Like most families, my husband is the primary breadwinner. A 20% pay cut is huge, especially when we have struggled with pay freezes and below-market wages for years under this employer. Three things immediately flew through my mind :
- How will we pay for grad school this summer?
- What if I'm pregnant?
- We just bought a house! Do we have still have enough savings to handle a furlough?
Many of you are facing the same emergency as my family. On March 1, 2013, $85.4 billion in across-the-board spending cuts went into effect as Congress refused to balance the federal budget. The White House has issued state-by-state reports detailing how programs in each state will be affected. As a fellow citizen, I urge all voters to contact their federal representatives about their thoughts on this issue.
Political petitions take time, while large pay cuts need to be dealt with immediately. What are some steps you can take when facing a significant decline in household income?
- Be prepared ahead of time
- If you are already spending less than you earn, it is much less painful when your income unexpectedly drops.
- Make sure your emergency fund is flush
- Emergency funds need to have enough money in them to actually deal with an emergency. As soon as we got a whiff of trouble on the horizon, we started throwing extra money into savings at our local credit union.
- Seek out additional sources of income
- If you lost your job, apply for unemployment
- Start a side businesses
- Get a new or second job
- Cut expenses
- Expenses are the easiest place to find extra money. Like our federal government, most Americans have a spending problem instead of a revenue problem. Consider that most non-Americans manage to live on less than $4 a day.
- Ask for help
- Sometimes we can't handle the emergency alone. Seek out help from friends, family, food banks, local churches, and government programs you are eligible for.
How is the sequester hitting your family?
What changes are you making to your budget?