A weak statewide job market could mean trouble ahead for residents.
A new study released on Monday by the Illinois-based Manufacturers’ News Inc. has found that industrial employment in the state of Alabama has seen significant declines in the last year.
Between March 2009 and March 2010, 21,132 industrial jobs were lost as 302 manufacturers went out of business throughout the state. The drop in jobs equated to a 6.8 percent decline in the available jobs in the state over that time period. It’s the most significant drop in the 20 year history of the survey.
Despite the negative figures documented in the survey, it also showed that the state’s transportation equipment sector showed signs of a recovery as Honda and GKN Aerospace plants in the state were planning expansions in the months to come. However, without the right training, industrial workers who’ve recently found themselves out of work may struggle to transition into this new sector.
In the meantime, Alabaman families may find it difficult to avoid financial distress even if they’ve taken steps to tighten their belts. Most families don’t have enough money in savings to cover even a few months of bills and necessary expenses without a new steady source of income.
“Surviving a layoff with your finances and credit intact can be extremely difficult if you don’t have savings already in place to weather the storm,” says Gary Herman, President of Consolidated Credit, “and often households end up turning to credit cards to cover budget gaps caused by lack of income. It’s an untenable situation that if left to continue for even a few months can lead to severe financial distress.”
Tips on how to reduce costs while you’re unemployed
During a period of unemployment, it’s essential to reduce costs as much as possible. Here are some tips from the experts at Consolidated Credit that can help you minimize monthly expenditures so it’s easier to get through a period where you have lower income or no income coming in at all.
- Close spending leaks. These are any points where you’re spending more money than what you have targeted in your budget. It could be because you stop for coffee every morning or you’re shopping specialty grocery stores instead of at a general supermarket or discount store. Maybe you’re paying for parking instead of hitting a public lot a few blocks down. Consider each expense in your budget carefully and find ways to cut back.
- Cut unnecessary expenses. This can be anything from that gym membership that you don’t use to monthly trips to the salon to change your hair color every month. Also look at paid accounts you have like entertainment streaming accounts – cut back to one provider or cut them entirely if you can deal with the loss of entertainment. Even tithes and recurring monthly charity donations should be scaled back. Remember, you can always put these expenses back in later once your household finances are stable.
- Consolidate credit cards and unsecured debt. Consolidating unsecured debt in a debt management program has been proven to reduce qualifying consumers’ total monthly credit card payments by 30-50 percent. This reduction in monthly obligations can ease budget stress while allowing you to keep up with your debt payments so you don’t ruin your credit.
- Defer or consolidate student loan debt. If you can defer federal student loan payments for a few months while you seek new employment then that may be your best option. If you have at least some income from a spouse or another income source, you may also consider student loan debt consolidation. Three federally approved programs provide reduced payments if you’re near or below the Federal Poverty Line for your state. In some cases, you may not have to pay anything without incurring penalties until you get a new job.
- Talk to a HUD-certified housing counselor. If you have a mortgage and you’re worried about being able to keep up with the payments, talk to a HUD-certified housing counselor. The consultation is always free so you can learn if you qualify for programs like HAMP or HARP that for mortgage modification and refinancing. Additionally, if your state has a Hardest Hit Fund program, you may qualify to have your mortgage payments covered for a period of time while you seek employment. You can also call your mortgage lender and ask about forbearance and other foreclosure relief options.