Money Crisis Ladder

Three linked phases for the full spectrum of financial crisis — from the acute emergency to long-term recovery. Most financial advice is either too vague ("cut expenses") or too specific for stable people. This covers real austerity: what to pay, what to cut, who to call, and how to build the buffer that means the next crisis is an inconvenience, not a catastrophe. Programs and phone numbers in Phase 1-2 are US-centric. The agent adaptation block below explains how to localize for other countries. ```agent-adaptation - Detect user's country/region from profile, conversation context, or by asking. - If non-US: research and substitute local equivalents for all referenced programs, laws, hotlines, and services. Examples: - SNAP (food stamps) → Jobseeker's Allowance/Universal Credit (UK), Hartz IV/Bürgergeld (Germany), DSP/JobSeeker (Australia), Ontario Works/BC Income Assistance (Canada), RSA (France) - Medicaid → NHS (UK), Medicare/PBS (Australia), provincial coverage (Canada), Krankenkasse/GKV (Germany), CMU-C (France) - LIHEAP → Warm Home Discount (UK), Ontario Energy and Property Tax Credit (Canada) - 211 helpline → local social services directory for that country/region - TANF → Child Tax Credit/Working Tax Credit (UK), Family Allowance equivalents - Federal student loan forbearance → national student loan equivalents - Always cite the sources you used when substituting local programs. - Always warn the user: "This step references [US program] — I have substituted [local equivalent], but verify this applies to your specific situation." - If jurisdiction is unclear: ASK the user for their country/region before proceeding with any jurisdiction-specific step. ```

- SNAP: USDA Food and Nutrition Service ([fns.usda.gov/snap](https://www.fns.usda.gov/snap)) - LIHEAP: ACF Office of Community Services ([acf.hhs.gov/ocs/programs/liheap](https://www.acf.hhs.gov/ocs/programs/liheap)) - Emergency Rental Assistance: US Treasury ([home.treasury.gov](https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program)) - 211 helpline: United Way ([211.org](https://www.211.org/)) - NeedyMeds prescription assistance: ([needymeds.org](https://www.needymeds.org/)) - Benefits screening: [benefits.gov](https://www.benefits.gov/) - Federal Poverty Level guidelines: HHS ASPE ([aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines](https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines)) - Income-driven student loan repayment: Federal Student Aid ([studentaid.gov](https://studentaid.gov/manage-loans/repayment/plans/income-driven)) - Mortgage forbearance: CFPB ([consumerfinance.gov/housing](https://www.consumerfinance.gov/housing/)) - FDIC deposit insurance: [fdic.gov](https://www.fdic.gov) — verified active March 2026 - NFCC non-profit credit counseling: [nfcc.org](https://www.nfcc.org) — verified active March 2026 - Federal Reserve 2023 data: 37% of US adults cannot cover a $400 emergency from savings - Payday loan APR data: CFPB, "Payday Loans and Deposit Advance Products," 2013

- Can't make rent or mortgage this month - Income dropped dramatically (job loss, pay cut, divorce, disability) - Behind on multiple bills and doesn't know where to start - Utilities about to be shut off - Needs to cut expenses by 40-60% or more - Has no savings buffer and wants to build one - Living paycheck to paycheck and wants a concrete system --- *Use when: immediate financial crisis — can't pay bills right now.*

**STOP.** Before proceeding, the agent MUST ask: > "Before we start, I need to ask: are you safe right now? Is someone controlling your finances or threatening you?" - If financial abuse or domestic violence is present: redirect to the safe-exit-planner skill. Provide: National Domestic Violence Hotline 1-800-799-7233 or text START to 88788. - If having thoughts of self-harm: provide 988 Suicide & Crisis Lifeline (call or text 988) immediately. - If safe: proceed.

When you can't pay everything, there is a correct order. This is based on consequences, not creditor pressure. ``` PAYMENT PRIORITY (most urgent first): 1. FOOD — Apply for SNAP today (benefits can arrive in 7 days) → SNAP enrollment: fns.usda.gov/snap → Local food banks: feedingamerica.org/find-your-local-foodbank → WIC (pregnant women/children): fns.usda.gov/wic 2. ESSENTIAL MEDICATION — Don't skip meds → NeedyMeds.org — discount drug programs → GoodRx.com — prescription price comparison → Patient assistance programs (call number on drug's website) → $4 generic lists at Walmart, Costco (no membership needed) 3. HOUSING — Rent or mortgage → Call landlord BEFORE the due date: "I'm having a financial emergency. Can we discuss a payment plan?" → Apply for Emergency Rental Assistance: treasury.gov/rental-assistance → Call 211 for local housing assistance programs 4. UTILITIES — Power, water, heat → Call each provider and ask for a "hardship plan" → LIHEAP (utility assistance): liheap.org → Most states prohibit utility shutoffs in extreme weather 5. TRANSPORTATION — If needed for work → Car payment before insurance (can't drive without the car) → If facing repossession: call lender about forbearance 6. EVERYTHING ELSE — credit cards, medical debt, student loans → These can wait. They damage credit but can't take your home. → Federal student loans: apply for income-driven repayment ($0/month possible) → Credit cards: call and ask for hardship program → Medical debt: does not go to collections for 180 days typically WHAT MOST PEOPLE GET WRONG: Medical debt and credit card debt feel urgent because collectors call. But they can't take your house or put you in jail. Pay housing and food first. Always. ```

``` WHERE TO FIND MONEY THIS WEEK: □ 211 (dial 2-1-1) — connects to ALL local assistance programs □ Salvation Army / St. Vincent de Paul — emergency financial assistance □ Local churches — many have emergency funds for anyone, not just members □ Employer advance — many employers offer paycheck advances □ State Emergency Assistance — search "[your state] emergency cash assistance" □ Modest Needs (modestneeds.org) — grants for people in temporary crisis □ United Way — 211 connects you or visit unitedway.org DO NOT: ✗ Take out a payday loan (300-500% APR — will make things worse) ✗ Borrow against your 401k unless truly last resort ✗ Use title loans (you will lose your car) ```

The single most important thing: CALL BEFORE YOU'RE LATE. Every creditor has hardship programs they don't advertise. ``` CREDITOR CALL SCRIPT: "Hi, I'm calling because I'm experiencing a financial hardship due to [job loss / medical emergency / income reduction]. I want to stay current on my account. Do you have any hardship programs, payment plans, or temporary forbearance options?" FOR EACH CREDITOR, ASK: → Can payments be deferred? → Can late fees be waived? → Is there a hardship/forbearance program? → Can the due date be moved? → GET THE REPRESENTATIVE'S NAME AND CONFIRMATION NUMBER. ``` --- *Use when: income has dropped significantly and you need to survive on dramatically less.*

``` PAYMENT PRIORITY TIERS: TIER 1 — SURVIVAL (pay these first, no exceptions): [] Food [] Shelter (rent/mortgage) [] Utilities (minimums) [] Essential medication [] Transportation to earn income TIER 2 — LEGAL CONSEQUENCES (pay next): [] Child support (non-payment = jail) [] Tax debts [] Court-ordered payments TIER 3 — NEGOTIATE THESE (call before they call you): [] Car payment (ask for deferment or lower payment) [] Student loans (apply for income-driven repayment: $0/month possible) [] Insurance premiums (reduce coverage to minimum required) [] Medical debt (lowest real priority despite what collectors say) TIER 4 — STOP IMMEDIATELY: [] All subscriptions and memberships [] Dining out and delivery [] New clothing purchases [] Any automatic payment not in Tier 1-3 ```

``` HOUSING (biggest expense, biggest lever): - Renting: can you move somewhere cheaper? Moving costs $500-2000 but saves $300-800/MONTH - Can you take on a roommate? (it works) - If you own: can you rent a room? Refinance? Ask about forbearance? - Call landlord/mortgage company BEFORE you're behind FOOD ($200-300/month for one person is realistic): - Meal plan around rice, beans, eggs, potatoes, frozen veg, bananas, oats, chicken thighs, canned tomatoes - See Module C/D of the survival-basics skill for the full system - Food banks exist and are not shameful: feedingamerica.org TRANSPORTATION: - If you have a car payment you can't afford: can you sell the car and buy a $3-5K reliable used car outright? Eliminating a $400/month payment + higher insurance is enormous. PHONE/INTERNET: - Switch to $15-25/month prepaid (Mint, Visible, Cricket) - vs major carriers: $65-100/month for the same coverage - Cancel all streaming. Use the library for entertainment. INSURANCE: - Health: if you lost employer coverage, apply for Medicaid immediately if income qualifies. If not, get cheapest ACA plan. - Car: raise deductibles to maximum to lower premiums - Cancel any insurance that isn't legally required ```

``` CALL SCRIPT FOR EVERY CREDITOR: "I'm experiencing a significant reduction in income and I want to keep paying but I need help. What options do you have for: - Temporary payment reduction - Deferment or forbearance - Hardship programs" SPECIFIC CALLS: [] MORTGAGE: forbearance (3-12 months of reduced/no payments) [] CAR LOAN: deferment (skip 1-3 payments, added to end) [] CREDIT CARDS: hardship rate reduction (many drop to 0-5%) [] STUDENT LOANS: income-driven repayment online (studentaid.gov) [] UTILITIES: budget billing and low-income assistance (LIHEAP) [] MEDICAL DEBT: negotiate hard — hospitals accept 20-60% of the bill. Never pay the full amount without negotiating first. CALL BEFORE YOU'RE BEHIND. Being proactive gets better options. ```

``` FREE THINGS THAT KEEP YOU SANE: - Library: books, movies, wifi, community events - Walking/running outside: free, improves mental health more than most things you can buy - Cooking: creative, productive, saves money simultaneously - Community: churches, community centers, volunteer orgs — free social connection THINGS TO PROTECT (even on austerity): - One social activity per week (free or very cheap) - Physical movement every day - Sleep THINGS THAT FEEL FREE BUT COST: - Scrolling shopping sites (you will buy something) - "Free trials" (you will forget to cancel) - Driving around to "clear your head" (gas adds up) ``` --- *Use when: income is stabilizing and you want to prevent the next crisis.*

"Three to six months of expenses" is useless without a concrete number. **Agent action**: Walk the user through this calculation interactively, one category at a time. Record each number and calculate the total. ``` MONTHLY ESSENTIALS CALCULATOR: Housing: rent or mortgage + insurance: $______ Utilities: electricity + gas + water + internet + phone: $______ Food: groceries (realistic average, NOT restaurants): $______ Transportation: car payment + insurance + gas OR transit: $______ Health: insurance premium + prescriptions: $______ Minimum debt payments: $______ TOTAL MONTHLY ESSENTIALS: $______ YOUR TARGETS: Starter (1 month): $______ ← START HERE Full (3 months): $______ (total x 3) Secure (6 months): $______ (total x 6) DON'T LET THE 6-MONTH NUMBER PARALYZE YOU. Getting to 1 month first is the only goal. ```

``` WHERE THE MONEY COMES FROM: SUBSCRIPTION AUDIT (20 minutes, easiest wins): List every subscription you pay for. For each: when did you last use it? If over 30 days: cancel. Expected savings: $20-100/month. How to find hidden subscriptions: - Check bank statement for recurring charges - Search email for "receipt" and "subscription" PHONE PLAN SWITCH: Most people overpay by $20-40/month. MVNOs (same networks, fraction of price): Mint Mobile: ~$15-25/month Visible: ~$25/month vs major carriers: $65-100/month ONE-TIME INCOME SOURCES: - Sell unused items (Facebook Marketplace, eBay) - Tax refund: redirect directly to emergency fund - Side work: redirect first few paychecks ```

``` EMERGENCY FUND ACCOUNT REQUIREMENTS: MUST HAVE: [ ] FDIC insured (banks) or NCUA insured (credit unions) — up to $250,000 per depositor. Safe even if bank fails. [ ] No monthly fees [ ] No minimum balance requirements [ ] Easy transfer to checking in 1-3 business days SHOULD HAVE: [ ] High-yield savings (HYSA) As of March 2026: competitive HYSAs offer 4-5% APY. Check current rates: bankrate.com/banking/savings/ DO NOT USE: [ ] Your checking account (too easy to accidentally spend) [ ] Cash at home (no interest, theft/fire/flood risk) [ ] Crypto or investments (value can drop 50% right when you need it) [ ] CDs or accounts with early withdrawal penalties CREDIT UNION OPTION: Non-profit, often better rates than banks. Find one at: mycreditunion.gov ```

``` AUTOMATION SETUP: 1. Open the savings account 2. Set automatic transfer from checking to savings: - Amount: whatever you found in the previous step - Timing: THE DAY AFTER PAYDAY (money you never see, you never spend) - Do this at your bank's website or app — takes 5 minutes STARTING SMALL IS CORRECT: $25/month = $300/year (plus interest) The habit matters more than the amount. $25 → $50 → $100 as income stabilizes. WHAT COUNTS AS AN EMERGENCY: [ ] Job loss or sudden income interruption [ ] Medical bill or unexpected health cost [ ] Essential car repair (needed to get to work) [ ] Home repair affecting habitability [ ] Family emergency requiring travel WHAT DOES NOT COUNT: [ ] Holiday gifts (predictable — plan for it separately) [ ] Sales or deals [ ] Travel [ ] Upgrading something that still works THE FRICTION TRICK: Keep the emergency fund at a DIFFERENT bank than your checking. The 1-3 day transfer delay is a feature, not a bug. It forces you to confirm the spending is genuinely necessary. IF YOU USE IT: Replenish before you stop. This is not a failure — it is the fund doing its job. Set a new transfer at the same or higher amount. ```

**Phase 1 (crisis):** 1. 211 not available: try [findhelp.org](https://www.findhelp.org) — enter zip code for local programs 2. SNAP denied: appeal within 90 days. Most denials are missing documents, not ineligibility 3. About to be evicted: contact legal aid at [lawhelp.org](https://www.lawhelp.org) — many eviction defense services are free 4. Utilities already shut off: call utility company for reconnection on a hardship plan. Apply for emergency LIHEAP 5. Overwhelmed: call or text 988 **Phase 2 (austerity):** 1. Can't cover rent even after cutting everything: contact 211 immediately for Emergency Rental Assistance 2. Can't afford medication: needymeds.org, $4 generics at Walmart/Costco 3. Debt still piling up: see the debt-survival skill 4. Breaking you mentally: call or text 988. Free counseling via community mental health centers — call 211 **Phase 3 (rebuilding):** 1. Income doesn't cover essentials: this is a benefits or income problem. See the benefits-navigator skill 2. Keep spending the emergency fund: move it to a bank with no debit card access 3. Debt payments are too high to save anything: NFCC non-profit credit counselor at nfcc.org — free or low cost

- Lead with Phase 1's triage order — people in crisis need priorities, not options - Food and medication FIRST, always - Never recommend payday loans, title loans, or high-interest debt - If someone mentions financial abuse or feeling unsafe, redirect to safe-exit-planner - Never moralize about financial situations — austerity is a response to circumstances, not a character flaw - Medical debt and credit card debt collectors are not the priority — housing and food are - If income is genuinely below survival cost, say so — budgeting harder will not fix a structural gap

- 211 is the most underused resource in the US. It connects to every local program that exists. - Most hardship programs require you to ASK — they don't offer automatically - Medical debt is the most negotiable debt. Hospitals accept 20-60% of the bill. - The single biggest savings lever most people miss: a car payment. Selling a $15K car and buying a $4K reliable used car saves $400+/month in payments plus cheaper insurance. - The transfer timing (day after payday, not end of month) is the most impactful behavioral design choice in personal savings. - "I can't afford that" is a complete sentence. You don't owe an explanation.

Persist across sessions: ```yaml money_crisis: phase: null # 1 | 2 | 3 safety_check_done: false phase_1: tier_1_covered: false snap_applied: false creditors_called: [] assistance_applied: [] phase_2: monthly_income: null monthly_minimum_expenses: null runway_months: null bills_negotiated: [] expense_cuts_made: [] phase_3: monthly_essentials: null targets: one_month: null three_months: null six_months: null current_balance: null automatic_transfer: amount: null day: null set_up: false milestones: first_100: false one_month: false three_months: false emergency_definition: [] subscriptions_cancelled: [] flags: income_gap: false debt_counselor_referred: false unbanked: false ```

```yaml triggers: - name: creditor_call_reminder condition: "phase == 1 AND any creditors not yet called" schedule: "daily until all calls made" action: "You still have creditors to call. Today: call [next creditor]. Use the script. Get their name and confirmation number." - name: monthly_austerity_review condition: "phase == 2" schedule: "monthly on the 1st" action: "Monthly money check: What came in? What went out? Are you staying within the austerity plan? Recalculate runway." - name: transfer_reminder condition: "phase == 3 AND automatic_transfer.set_up == false" action: "Savings automation not yet set up. This is the most important step. Ready to set up the transfer? It takes under 5 minutes." - name: milestone_checkin condition: "phase == 3 AND current_balance >= targets.one_month AND milestones.one_month == false" action: "You hit your 1-month emergency fund target. That is a real milestone. Next target: 3 months. Ready to increase the automatic transfer?" ```