Bad news for state workers in California: furloughs. The Governor has announced that all state offices will be closed on the first and third Friday of the month starting February 6 and running through June, 2010. This is an effort to save the state money since the Governor and legislative officials cannot reach a budget. (I will not opine on whose fault it is, but notice that the legislators are not taking a pay cut. The Governor refuses a salary.)
What does this mean? A 10% pay cut for state workers. If you were paying all of your bills and putting away 10% at the end of each month, you can still pay all of your bills. However, if you were living paycheck to pay check, you are now going to be short 10% of your income. That creates a problem.
State workers need to look at their bills and figure out what to do. Things not to do include:
- Panic;
- Hire a debt consolidator;
- Stop paying your mortgage completely.
I have put together a new report from state workers on how they can avoid foreclosure. It is available free at state@jonathangstein.com. I am also going to do my part: 10% off of the fee for any state worker who calls me during the furlough.