Navigating Income Loss
Income loss can come in various forms, including job loss, fewer hours worked, reduced wages, furloughs or layoffs, and temporary shutdowns. Many people and businesses in our community have experienced these circumstances due to the COVID-19 pandemic. Suddenly losing your job or your income is a stressful situation to navigate. Income loss not only affects your finances, it can also take a toll on your mind and body. Fortunately, there are steps you can take to help you recover your finances and we are here to help guide you through those steps.
Your path to navigating income loss should include stops along the way to scrutinize your options, downsize your spending, and energize your spirit.
Scrutinize
Your first step is scrutinizing your options, which includes reviewing your budget. Take a look at your spending over the last 3 months and track exactly where your money is going. This will help you decide which expenses to cut out or at least cut down in the next step. It’s also important to remember that you do not have to navigate this setback alone. Reach out to your family and friends for support, and research organizations in your community that may be able to offer assistance. You can also check to see if you qualify for any unemployment benefits or government assistance programs to help make ends meet until you get back on your feet.
Downsize
The next step is downsizing your budget, which includes reducing your spending, evaluating your assets, and increasing your cash flow. Reduce your spending by eliminating non-essential purchases and using cost-saving alternatives for the expenses you can’t cut, like switching to generic brands or couponing to help you save more. Next, evaluate your assets by taking stock of your savings and investments, and decide if it makes sense to use these funds as part of your recovery. After all, a situation like losing your job is exactly what an emergency fund is for. And lastly, increase your cash flow and make your money stretch a little farther by selling any items you no longer need and using the profits to keep money coming until you have a more permanent solution in place.
Energize
Last, but certainly not least, energizing your spirit can help you combat the non-financial effects of income loss that can take a negative toll on your mental health. Do things that help you reduce stress and stay motivated so you can focus your energy on recovering from the loss of income. Keeping your routine as consistent as possible and maintaining social interactions can help you avoid feeling stuck and isolated in the wake of income loss. Introduce new tasks to fill your time like working on your job search, learning something new, and practicing self-care. You can devote time to refreshing your résumé, practicing interview skills, and searching for job opportunities. All of these tasks help you focus on and appreciate your accomplishments, which will help you battle burnout. You can also invest in yourself and turn this temporary setback into an opportunity by developing a new skill or pursuing a new interest. You can explore the many free courses and tutorials available online to help you learn a new program or explore a new industry. And perhaps most importantly, remember to eat well, stay hydrated, and try to maintain a consistent sleep schedule. Although these aspects seem less urgent than the financial costs of lost income, they play a critical role in your overall well-being. Maintaining a healthy mind and body and getting plenty of rest are essential in helping you deal with stress.
By addressing both the financial and the non-financial setbacks related to income loss, you can diminish the obstacles on your path to recovery. And remember that even though navigating income loss is stressful, you don’t have to navigate it alone. We are here to help guide you throughout your recovery and we stand by ready to work with you to minimize financial impact.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.