Navigating Reduced Income
Many Americans are facing drastically reduced income due to the Covid-19 pandemic. Some people have lost their jobs, or have reduced work available to them. Below are our tips on surviving on less income.
Analyze the numbers
When your income is reduced, it's important to take a close look at your budget and make some changes. You may need to cut back on your spending in order to make ends meet. This can be difficult, but there are some things you can do to make it easier.
First, take a good look at your expenses and see where you can cut back. Do you have any subscriptions or memberships that you can cancel? Can you reduce your grocery bill by eating out less often? Are there any other areas where you can save money?
Once you've identified some ways to save money, it's time to start tracking your spending. This will help you stay on budget and avoid overspending. There are a number of apps and websites that can help you track your expenses. Find one that works for you and start tracking your spending for a month. At the end of the month, see where you were able to save money and where you may need to cut back further.
Making changes to your budget can be challenging, but it's important to do what you can to reduce your expenses when your income is reduced. By taking a close look at your spending and making some adjustments, you can make it
Talk to your service providers and financial institutions
Many people are struggling to make ends meet due to the current economic crisis. If you are one of those people, it is important to reach out to your service providers and financial institutions to see if they can help.
Many companies are offering hardship programs that can provide relief on things like monthly payments or interest rates. Your financial institution may also be able to offer assistance in the form of a loan or debt consolidation. Don't be afraid to ask for help - many people are in the same situation as you and there is no shame in admitting that you need assistance.
Remember, these companies want to help keep your business, so they will likely be willing to work with you to find a solution that works for both of you.
Immediately cut all non-essentials
When income is reduced, it can be difficult to know where to cut costs. However, there are some non-essential expenses that can be immediately cut in order to save money.
For example, cable TV and other premium channels can be ditched in favor of a lower-cost basic package or streaming service. Eating out at restaurants can also be replaced with cooking at home.
If possible, reduce or eliminate discretionary shopping such as clothes, electronics, and vacations. These cuts may not be easy, but they can help to stretch a reduced income further.
Apply for any and all assistance
When an individual or family experiences a reduction in income, it can be difficult to make ends meet. Many people are reluctant to apply for assistance, but there is no shame in asking for help when you need it.
There are numerous programs available to assist low-income families, and many of them are easy to apply for. For example, the Supplemental Nutrition Assistance Program (SNAP) provides food benefits to eligible households, and the Low Income Home Energy Assistance Program (LIHEAP) helps families with their energy bills.
There are also programs that provide free or reduced-cost health care, child care, and housing. By taking advantage of these programs, families can reduce their financial stress and better weather tough times.
Keep looking for additional income
Many people have experienced a reduction in income at some point in their lives. Whether it's due to a change in employment, an unexpected medical bill, or simply bad luck, a drop in income can be a difficult thing to deal with.
One of the best ways to cope with a reduced income is to keep looking for additional sources of income. There are many ways to do this, such as taking on extra work, selling personal belongings, or even finding creative ways to save money.
By taking proactive steps to increase your income, you can help offset the effects of a reduced income and keep your finances on track.
Update any support payments
If you are paying for spousal, child, or other support, you should consider filing with the court to have those payments modified based on your current income or lack of income. If you are not making required support payments, you could be on the hook for arrears, plus interest. It is in your best interest to ask for a modification with the courts to avoid any judgment against you.
Explore odd jobs
Another source of income could come from using your skills, talents, or hobbies for paying gigs. Figure out what you can offer, and then reach out to your network for help promoting yourself and what you can do. This could be anything from selling masks you sew, handyman work, cooking, cleaning, or auto repair.
Learn to DIY
Many expenses can be saved by doing things yourself that you would normally pay someone else to do for you. Learn basic lawn care so you can cancel your gardener. Wash and clean out your car at home rather than taking it to the detailer. Clip and groom your pets yourself instead of taking them to a groomer.
You can also learn to do your own personal care routines, such as giving yourself a manicure. You will be surprised how quickly you start saving money by doing things for yourself.
It can be tempting to want to socialize when faced with reduced income, but staying home is often the better option. Not only will staying home save you money, but it can also help you to focus on more important things.
When you're trying to reduce your expenses, every penny counts. That's why it's important to be intentional about how you're spending your money. Instead of going out and socializing, use that money to pay down debt or build up your savings. Staying home can also help you to focus on your financial goals.
It's easy to get caught up in the moment and spend money on things you don't really need when you're out with friends. But if you're at home, you can take the time to think about your goals and make sure that your spending aligns with them.
In the long run, staying home and being mindful about your spending can help you to save money and achieve your financial goals.
Find free ways to stay entertained and healthy
Staying at home may not seem very exciting, but it is a great opportunity to find new hobbies, catch up on your reading list, or renew an old talent you haven’t had time for lately. It is also a great opportunity to focus on your health by exercising and meditating at home. Selfcare does not have to cost anything, and you will be happier for it.
Make Informed Decisions About Your Finances
We recognize that mastering money and finances is a continuous journey. That's why we want to provide you with the tools to create a bright financial future. No matter where you are in your financial journey, there is always room to learn. Visit our Financial Wellness page for more articles and resources on a variety of financial topics.