Credit Basics
HURRICANE COSTS AND FINANCIAL LOSSES DEVASTE MANY FLORIDIANS
The financial impact may overwhelm those living paycheck to paycheck, credit counseling service warns.
The average expense for basic hurricane
supplies is about $425. Lost wages for Florida's hourly workers is in the millions.
Consolidated Credit Counseling Services, a nonprofit organization, has some advice
to help people cope with the financial devastation that can accompany a natural
disaster.
"Not all of the damage done by Florida Hurricanes
is visible. The negative financial impact may scare well after the lights are back
on and the home repairs are done." said
Howard Dvorkin, founder of the nonprofit
organization Consolidated Credit Counseling Services, Inc.
"With less than a weeks notice, the average family
has trouble coming up with the funds they need to buy basic supplies. Then throw
in the need for plywood, fuel for cars, a hotel room due to loss of power and the
need to get cash to have on hand in case ATMs and credit card machines stop working
could add another $400 - $500 to the cost of basic supplies."
Consider that the average weekly gross income for
Floridians is $675; after taxes and other deductions that figure is knocked down
to about $440 per week. The annual savings rate for most American is about 1%, leaving
about $350 in the bank for emergencies.
The Sunshine State has become the recovery state
as power outages, gas shortages, flooding and property damage disrupts the lives
of millions from the Panhandle to the Florida Keys. "Credit cards can be a life
saver in times of emergency, but for those who live near the financial edge the
cost of a natural disaster can do them in" continued Dvorkin.
People who are financially vulnerable and need help
can call Consolidated Credit's counseling hotline at 1-800-SAVE-ME-2 (800-728-3632).
Counselors can offer free financial advice to help those who are living on the financial
edge and will help people gain clarity about what steps should be taken next. "Many
families without a reserve fund for emergencies tap whatever resources they have
and credit is a great tool for dealing with financial emergencies, but I want to caution everyone to pay close attention to their budget after these natural disasters
have passed" warns Dvorkin.
Dvorkin's money rules to get out of debt if relying
on credit cards for hurricane repairs and supplies:
-After hurricane season has ended start a "hurricane fund" for next year. Sock away $20 per pay period and you could have over $1,000 saved by next September.
-After necessary repairs have been made, start to live on cash and stop incurring new credit card debt.
-Track your spending and carefully prepare a budget including fixed and flexible expenses. For a free "How to Budget" kit go to www.ConsolidatedCredit.org
-Transfer high interest rate balances to one card with a low interest rate and stop using the card while paying at least each months incurred interest plus the minimum due.
-If you are having a hard time paying your bills find out about Debt Management Programs by calling 1-800-299-HELP (800-299-4357). You can organize debts into one low monthly payment, reduce or eliminate interest charges, and help restore credit ratings.
-If you have lost your job due to the Hurricanes call Agency for Workforce Innovation Unemployment Claims: 1-800-204-2418 or visit the Emergency Internet Site at www.floridajobs.org/awi_emergency2.htm
