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What to Do When You Run Out of Money

Programs that Help Get You on the Right Track

When most Americans think about emergency assistance programs, the first one that probably comes to mind is food stamps, but there are many other programs in communities around the country that can help low income families shoulder the cost of energy bills, prescriptions, housing and more and so they have a better chance of getting back on their feet. You just need to know where to look.

Financial Planning Assistance: No one needs the advice of a financial planner quite as much as someone who has run out of money, but it may take some extra effort to track down one that doesn't charge you for their services. Luckily, many charity organizations can connect low-income families to planners who do pro bono work. Some centers affiliated with the United Way provide access to planners who will assess the individual’s fiscal situation and help develop a plan to improve it. Likewise, the Community Action Partnership, a national organization that fights poverty, boasts HUD-certified counselors who can act as an intermediary for homeowners to renegotiate their mortgages.

LIHEAP: There are several nonprofit and government programs that help households cut their energy costs, but the Low Income Home Energy Assistance Program (LIHEAP) is particularly helpful. The federal government provides block grants to help weatherize low income households – by installing insulation, for example – so that the home functions more efficiently and the monthly energy costs are lower. The requirements for this program vary somewhat from state to state, but applicants typically need to be at or near the poverty level to qualify.

Section 8 Housing: If the individual can no longer afford the cost of a home, this government program will provide him or her with a cheaper option on the market. The Section 8 housing program is intended to help low-income families, the elderly and the disabled gain access to safe housing. To qualify for the program, the family’s income generally can’t be more than 50% higher than the median income in their county. The housing isn’t free but the family need only pay 30% of their monthly income for rent – whether that income is $500 or $5,000.  The program is intended to help low-income families, the elderly and the disabled find a decent play to live when they need it.

Emergency Medical Funds: One big concern for the elderly living in poverty is finding ways to cover prescription drug costs, but many programs do just that. The AARP provides a simple-to-use directory that lists all the available programs by state.

Individual Development Accounts: Finally, the federal government provides grants to nonprofits and government agencies to help them administer special savings accounts known as Individual Development Accounts for low-income individuals. The account works similarly to a company 401(k) in that every dollar the individual puts into the account is matched by funds from the grant until the account hits $2,000. The goal is to provide an incentive to get families with no money to start building up their savings again and with any luck find their way to more stable fiscal ground.

For more programs in your area, you can dial 211, a confidential call center service run by United Way which can direct callers to the relevant programs in their area.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

Read More:   budget & save, savings
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