UNIVERSITY PARK, Pa. -- With incomes dropping, lay-offs rising and home foreclosures everywhere signaling a struggling economy, an extension consumer finance specialist in Penn State’s College of Agricultural Sciences offers tips for dealing with financial difficulty.

"Aside from the newspaper headlines, the comments I hear from consumers are about the increased cost of food and gas, and they’re making conscious efforts to plan shopping or errand trips," says Cathy Bowen, associate professor of agricultural and extension education. "We're seeing layoffs and jobs moving overseas, but income can be lost for other reasons, such as divorce, natural disasters, illness or injury.

"If your income drops unexpectedly, it’s important not to panic but to access the resources that can help you to survive financially."

Bowen has worked with Natalie Ferry, retired coordinator of special program initiatives for Penn State Cooperative Extension, and Marilyn Furry, associate professor of agricultural and extension education, to create a series of 11 fact sheets titled, "Bouncing Back When Your Incomes Drops."

"The series was created to help families that have to make adjustments in meeting basic needs when there is a job loss or some other event that causes an unexpected loss of income," Bowen says. "Also, people who are entering the work force for the first time -- welfare-to-work program participants, for instance -- could use some of the publications in the series.”

When income is suddenly lost, Bowen notes, it is important to look at what assets or resources you have and in what areas spending can be reduced. “The top priorities should be the basic expenses -- housing and groceries," she says.

Once housing and food needs are met, Bowen recommends calling creditors to negotiate payments. "Not all creditors will be willing to work with you, but with the slow housing market and slowing economy, many of them will do what they can to make things work," she says. “Also, many communities offer services to struggling residents, so take stock of community resources to see where help is available and what you qualify for."

When your income is decreasing, Bowen says, there are two obvious options: lower your expenses to fit the available income or work another job or increase hours worked on the current job. It’s also important to keep a positive attitude.

“If you find yourself in a decreased-income situation, keep in mind that this is just a point in time and that this time will pass,” she says. “Look for spending leaks, and repeat to yourself and family members that the situation is not forever. With some belt tightening and careful watching of spending, you can weather this period in your life. Once your income increases, make sure you rebuild your emergency fund to prepare for an unexpected income drop, should it occur again.”

For those who haven't yet experienced economic difficulty, Bowen says it's never too early to start preparing for an unexpected income loss. "We recommend individuals and families keep an emergency fund with enough money to cover expenses for three to six months. It's also very important not to rely on credit cards, if possible."

Bowen says the publications can be comforting to families still reeling from sudden financial reverses.

“About two years ago, there was a plant closing in a neighboring county when jobs were shipped overseas,” she says. “The moment the story hit the local newspaper, an extension educator included the Bouncing Back series in packets of information for distribution to the soon-to-be-laid-off workers as a resource.”

The “Bouncing Back When Your Income Drops” fact sheets are available online at http://consumerissues.cas.psu.edu/pubs.html . Single copies can be obtained free of charge by Pennsylvania residents through county Penn State Cooperative Extension offices, or by contacting the College of Agricultural Sciences Publications Distribution Center at 814-865-6713 or by e-mail at AgPubsDist@psu.edu. For cost information on out-of-state or bulk orders, contact the Publications Distribution Center.

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EDITORS: Contact Cathy Bowen at 814-863-7870, or by e-mail at cbowen@psu.edu.

Writer-Editor: Gary Abdullah 814-863-2708 gxa2@psu.edu