Money Matters

How to Manage a Loss of Income

We all hope that life will serve us well. Alas, that can’t always be the case. As you go through life, you’ll experience difficulties and tough moments, just like everyone else does. The best that you can hope is that these difficulties aren’t too severe and that you’re able to navigate them well. 

There’s no shortage of things that can befall you in life. It could be a health issue, losing a loved one, or losing your employment (or other sources of income). In this blog, we’re going to focus on the latter, outlining some handy tips that’ll help you to manage the blow of losing an income. 

Stay Calm

To begin, remember to stay calm. It can be difficult to learn that you won’t be making as much money as you used to. It is not, however, the end of the world, even if it might feel like it at the time. People have come back from situations far worse than losing a job, and you will too. 

Taking a calm approach is also important because it can prevent you from making a rash decision that might end up making your situation worse. Your inclination will be to do anything that might help to resolve the problem, but it’s best to stay patient and wait for the right solution. 

See What You’re Entitled To

You might feel like you have to face this problem all on your own, but that’s not the case. There are support systems in place that can help you to manage the financial impact of losing your income. If you’ve lost your job, then the first thing you’ll want to do is file for unemployment. You’ll have paid a lot of taxes over the years for this very reason, so don’t delay in making a claim. You should be able to get around 50% of your lost income for around half a year. 

Cut Back on Expenses

Now is not the time to continue with any expensive plans. Indeed, the opposite approach is the right one — you should essentially cut back on all unnecessary expenses, at least until you have a solid plan in place. You might want to follow through with your plan to take a trip or renovate your kitchen, but those won’t be realistic goals right now. You’ll have much better peace of mind if you know that you’ve got a lump sum of money to call upon should it be required. 

In addition to those potentially large expenses, there can be value in cutting out all expenses. You can live pretty cheaply if you make budget meals and cut down on any subscription services. 

Maintain the Essentials

While it’s advisable to cut some expenses, it’s also important to maintain the essentials. You can’t or shouldn’t stop paying bills that would impact your credit score in the future — your credit card bills, for example. With that being said, it may be a good idea to speak to your credit card company to see if you can move to a more favorable rate. 

Another key area to focus on is your home. In fact, it’s probably the key area. Your loss of income should not mean that you have to lose your property. If you feel that you’ll have trouble paying your mortgage, then read up on the foreclosure and bankruptcy process. It’ll help to keep you in your home while you figure things out. 

Talk to Your Network 

You may have lost your income, but that doesn’t mean that you’ve lost it forever. You will find more employment in the future. One way to get this ball moving is to ask in your network. You don’t know which friend or family member may be in a position to offer you short-term work. It might not replace all of your income, or be in a field that you want to pursue in the future, but it’ll bring money into your bank account, and that’s the main thing that matters. And who knows? You might fall into a job that you really do love and want to do on a long-term basis. 

Maintain Your Mental Health

Finally, take steps to maintain your mental health. It’s normal for your mental health to spiral when you face difficult moments, but there are things you can do to keep it on the right path. Being kind to yourself, spending time with friends and family, and making time for activities that you enjoy will all help to keep your spirits up. 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top