We’re heavily reliant on a steady stream of income to keep our finances stable.
By knowing exactly how much money we’re getting every month, it allows us to set budgets and plan our money better. This is why one of the first steps to achieving financial stability is to get a job and gain a regular source of income.
But, what happens when you suffer a loss of income? There was plenty of money coming into your bank account, you had a budget designed around it, but now it’s suffered a hit. Less money is coming in, but your bills all remain the same, meaning you’re under serious financial stress. If this happens to you, here’s what you need to do.
Identify the cause
The first thing you need to do is identify the cause of your loss of income. Numerous things could be at play here, and each one demands a different course of action.
One reason your income may decrease is that you’re put out of work after an accident and have a temporary disability that stops you from doing your job. In this scenario, you might get paid temporarily, but you could be out for so long that you stop being entitled to your sick pay. If this happens, places like LaPorte Law Firm say you can apply for benefits. Do this, and you can give your income a significant boost while you recover. Then, return to work and get your regular source of income back.
Another reason is that you’ve been fired from your job. Here, the solution is simple; find another job ASAP. Don’t wait around as you’ll have no source of income at all. Find a part-time job if you have to, or do some freelance work until you find something permanent.
Of course, you could get hit with a wage cut at work due to the business doing poorly. This is a tough one to stomach as you may love your job but get paid less than you deserve. Again, you could look for a new job here, or consider work on the side to gain extra money.
Lower your bills
I highly recommend you attempt to lower all of your bills when your income decreases. Contact your energy provider, phone company, TV company, and try to negotiate cheaper deals.
This might mean paying for packages that aren’t as complete as the ones you’re on, but it has to be done in this scenario.
Don’t get a quick loan
One thing you definitely shouldn’t do is apply for a quick, short-term loan. These are handy when you have a random large expense to pay for and need an extra cash boost. But, when your income decreases, loans are the last place to turn to. Why? Because you might get some extra money to help you, but you’ll also have a loan to repay without your regular source of income. This could mean it takes longer to repay, leading to high-interest rates and serious debt.
So, if your income suddenly decreases, follow the advice laid out for you in this guide. It will help you cope with the situation and avoid debt as much as possible.