Keeping Your Life Afloat When Your Income Stops
When you’re income stops, it’s a shock to the system.
A lot of our worries derive from money (usually the lack of it) and so, with one less income, or no income coming into your home at all, you’re probably frantic about what you can do.
If you’ve been injury and can’t afford to wait to see if the case put forward by your Personal Injury Lawyers will succeed, if you’ve lost your job, or the business you worked for has gone into liquidation the outcome for you is the same – To figure out your situation as quickly as possible.
If you’ve had a financial setback, this article is helpful.
Give it your all and start by reading this guide and putting into practice the below mentioned in a bid to keep your life afloat.
Contents
Categorize Your Expenses
If you haven’t already, make a budget of everything that leaves your account(s) and divide all of these into three different categories; necessities, wants, and savings.
Necessities
The necessities are what you need to pay to survive. These include your mortgage/rent, gas, electric, water, food budget, and travel to get your kids to school and your partner to work. After figuring out the cost to live, there is room here to bring down your spending on necessities or swap them for cheaper alternatives.
You may try switching energy providers, reducing your food budget, being more proactive with using less electricity and gas and- if needed- downsizing your home.
Wants
Sports club memberships, designer clothes are not things you need to survive.
These are luxuries, and so in terms of your spending, you can effectively cut this budget down as much as you need too. As an alternative, you could consider swapping expensive dinners out for affordable takeout food or cancelling your routine hair salon appointment for a box of DIY hair dye from the drug store.
Savings
Anything you would usually save in your kids’ accounts, emergency fund etc., may need to take a back seat, as this income may need to support your basic needs until you can get back on your feet financially.
Cutting back your budget will allow you to see if you need to make up the difference while your income is reduced. If you need to urgently find ways to bridge the gap in your finances, here are a few solutions:
You could ask your spouse/partner if they could boost their hours at work or look for a full-time job to fill the gap.
This article can help you become a freelancer, and earn more income.
You might want to consider stretching your skillset. For instance, if you worked as a builder but are now unable to do the job due to an injury, you could consider jobs that are not physically demanding, such as an office job.
Depending on the state you live in and your circumstances you may be entitled to state benefits. It’s worth checking the government website to see whether the government could help you overcome your setback.
By taking time to sit down and work out your outgoings, you can cut down your outgoings significantly and then plan going forward what you or your family need to do to help tie things over until you’re back on your feet.
You can do it!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(website and blog) https://www.accountingaccidentally.com/