10 Things You Can Do To Cope With a Loss of Income

Updated: Dec 1, 2020

2020 has been one hell of a year, and one thing it has taught us over and over again, we have no idea what's around the corner. With coronavirus raging havoc with the economy, many industries are feeling the pinch and are having to make redundancies to be able to survive, and it is more riskier than ever to be self-employed. That being said, there ARE things you can do to prepare for the worst, and this post should give you some idea of how to cope with a loss of income.

Breathe. If you've found out you're about to loose a major source of income, take the time to absorb this information, all yourself the opportunity to feel emotions. It can be easy to be sucked into working on 'what's next' in order to survive and push through, but this is a stressful situation. Allow yourself the opportunity to breathe. If you find yourself with more time at home, why not try these Things to Do at Home to Keep Your Mind Occupied.

Budget. If you don't already have a monthly budget, now is the time to start. Work out your fixed expenses (expenses that don't change, and ones with a set deadline each month), your variable expenses (these are usually not your bills, but your 'wants', expenses that change month to month) and how much you can afford to put towards paying off debt to reduce your monthly expenditure. Use this time to work out your 'bare bones budget'- how much you need to survive. To ensure your bills are paid and there's food on the table. Here are some tips to save on the weekly food shop!

Check your benefit entitlement. A lot of people don't realise what's available to them. Use entitledto.co.uk to see if you're eligible for government help. It's there for you to use, and there is no shame in doing so.

Utilise Savings. Do you have an emergency fund? Great! That is exactly what this situation is for! This is why we aim to save around 3-6 months worth of expenses, for this situation. If you don't have an emergency fund, use other savings available to you. That trip to Bali you've been saving for? It's time to push that holiday back a bit so you're able to survive.

Negotiate with debtors. Have credit cards or loans? Ask for lower interest rates, maybe even consider consolidating them to make the repayments easier during this time. Utility bills? Look around for better deals, haggle with companies for the best rates! Mortgage? You might be able to get a mortgage holiday during this time.

Use family if you are able to. While this not be available for everyone, if you have family who are able and willing to help, let them. You know what's better than a 500% APR payday loan? An interest free loan from your dad! Well.., you can always pay interest in the form of beer...

Update your CV. Now is the time to prepare your CV for applying for new jobs. Make a list of all your achievements in your past roles. Discuss your skills with a work friend if you can. It's usually easier to talk up your skills when looked at from an outside perspective.

Side hustle. There are so many ways of making money online, I've listed my favourites here! It's likely you'll now have free time, use that to find new income streams. Blogging, YouTube, Crafts, Selling your clutter. Make sure you understand how to pay tax on this income here! And before joining any MLMs, why not check out Can You Make Money From Home? - The Truth Behind MLM's.

Upskill. Use this time wisely. Is there something you've always wanted to learn but never had the time... well here it is! There are tonnes of free resources out there and courses available! Build that CV! Learn profitable skills!

Ensure you allow yourself free time. Spend time with your family, friends, partner. Make sure you're having fun. Go for walks, get that fresh air. Eat well. Rest up. Big things are coming!

Use this time to up your personal finance game. Get yourself a copy of The Financial Workbook. Everything you need to know about personal finance, supported by interactive worksheets so that you're not just absorbing this knowledge, you're actioning it.

©2020 by Millennial Saves.