Bankers Set for Unemployment Line

Posted: 16 Aug 2011 07:00 AM PDT

While the retail and manufacturing sectors have been easily the hardest hit by the appalling unemployment picture, now the banking industry is aching with massive layoffs planned. HSBC plans to fire approximately 30,000 employees worldwide by 2013 and the bulk of those firings will be in the U.S. Upstate New York will be hardest hit, as HSBC sells off 195 of its retail branches to First Niagara Bank. The majority of these select branches are located in that area. The sale will help raise about $1 billion for HSBC. Besides the layoffs, HSBC is planning on reducing their payroll to offset their disappointing revenues. In an ironic twist, HSBC reported better-than-expected profits for the last six months and intends to continue its expansion into Scotland.

photo credit: philcampbell

European banks are imploding with layoffs. For example, a sample of eight banks shows layoffs of some 63,000 employees. The justifications for these layoffs are two things: stagnant revenues and dire global forecasts. There is certainly validity behind these justifications. People are scared, investors are scared: any one paying attention to the global financial markets has good reason to be scared. The bad news coming out of Europe and the U.S. would make anyone want to stuff their money under their mattress. Of course, there are just as many who feel that the bloated banking system was due to collapse under its own weight.

Banks have flourished in the last decade or two, popping up like dandelions on city streets, all vying for consumer's attention. New products and services pop up daily to make banking more accessible and convenient for the consumer. And banks did make an awful lot of money on credit card interest and over-priced property loans. This was before the real estate bubble burst, though. After the big bailout, banking practices once clandestine were exposed to the American public. This generally caused much dissension between banks and their prospective customers. Even President Obama commented grimly on the bailout which he once championed: "we all hated the bank bailout. I hated it. You hated it. It was as popular as a root canal.”

While the banking industry may be in disarray, this can have benefits for the consumer. As a general rule, the consumer wins when industries compete. Banks are doing what it takes to attract your business. Of course, the biggest savings in banking is the unbelievably low mortgage rates of today. We will most likely never see rates, this low again, in our lifetimes. Combine this low mortgage rate with the low prices homes sell for in this extreme buyer's market and now may be one of the best times to purchase a new home.

Michael German is an expert in the field of personal finance and a graduate of Columbia University. His lengthy tenure includes literary work with The New York Times international weekly edition, where he contribute reports on global economy and consumer trends. As a writer and researcher in personal finance, Michael is also a contributor to themanhattandaily.com, freemoneywisdom, and many other online and print publications.

What to do When You Can’t Pay Your Bill

Posted: 16 Aug 2011 04:00 AM PDT

Most of us do what we can to meet our obligations as agreed. However, there are times when it just isn’t possible to make all of your bill payments. If you are worried about paying your bills, you do have options. However, it is important to be up front about your late payment, and what is happening with your finances.

photo credit: cafemama

First: Evaluate Your Situation

The first thing you need to do is to evaluate your situation. Are you experiencing a temporary shortfall? Maybe you had an unexpected emergency expense that drained your finances, and you will be back on track quickly. On the other hand, you might be experiencing a more difficult and long-lasting setback, such as the loss of a job. How you handle your obligations will depend on the expected time frame of your finances, and what it will take to get back on your feet.

Next, take a look at other areas of your finances. Do you have an emergency fund that can help you out? How long will the fund last? Are there expenses you can cut back on to help make ends meet? Even if you plan to get outside help, you need to have a plan ready for meeting your obligations; showing that you have thought about the issue will incline creditors and others toward working with you.

Contact the Company

If you aren’t going to be able to make a payment, you need to contact the company ASAP. This is especially true if you know that you will be unable to make payments for a long period of time. Contact the company and find out what your options are. If you contact the company early enough, the company might be able to work with you in order to work out a payment plan, or explore other options. Explain your situation, and what you are doing to make things better so that the company has an idea of the effort you are putting in to meeting your obligations.

Prioritizing Your Bills

For some people, a financial setback is large enough that more than one payment is at risk. In these cases, it is usually a good idea to prioritize your bills. Even though you might be most worried about the credit cards, these are often the last bills to pay, since they represent unsecured debt. Instead, if you want to keep your home, the first bill to keep current on is your mortgage payment. You also might want to make sure that utilities like electricity and heat are kept current so that you have those needs taken care of.

Getting More Help

If you are truly struggling with meeting your obligations, you can look for more help elsewhere. Friends and family might be able to help you in different ways. Even if they don’t give you money, you might be able to get help with groceries, or with child care while you look for a job. Additionally, there are government agencies and charities that might be able to give you some direction for getting help. Even your church congregation might have some sort of resources set aside for helping those that need it.

There is no reason to suffer in silence; instead, contact your creditors, and let your family know what help you need. You might be able to get just the help you need to get back on your feet.

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