These are not ordinary times, with the CO-VID pandemic and job losses. People are scared to death and having a rough time making ends meet.
What can I do to get myself stabilized when my income drops?
1. Allow yourself to be scared, do it afraid.
There will be many emotions so take care of yourself during this difficult time. Important to take positive steps to stabilize yourself and your family. Sign up for unemployment benefits immediately, if you have no job. Inaction can cause things to get worse. OSTRICH picture
2. Have a survival attitude and talk to your family about what is happening (age appropriate).
Ask for suggestions and ways to help during this time. Look at what you have and how you can use during this time to make it through. Let your family know about the changes and how it will be different. Making challenges into things to be solved or obstacles to climb, can be helpful. Then re-evaluate when the financial storm has passed.
3. Create an overall Written Plan:
Look at what you HAVE to potentially turn into cash. You can harvest money from assets, what you own. Your net worth is what you own minus what you owe, calculate.
- Calculate your net worth, write down everything you own and minus what you owe. Anything you own can potentially be turned into quick cash. Remember that unplugging your retirement savings is a last resort and comes with penalties.
- Start a spending plan, what do you have as income and as expenses? PRIORITIZE for the current situation. With your spending plan, if you do not have enough to cover all expenses, CALL you LENDER immediately and communicate with them. Be prepared to explain the details and work out a payment plan or other option until you stabilize.
The most important expenses are:
- Way to get to work, if still working
- Insurances, letting these lapse may cause bigger problems
4. Step Down your Spending
(Created by Professor Alena Johnson at Utah State University)
How can I reduce my spending?
By following the step-down principle, spending is reduced in gradual stages as opposed to eliminating spending on an item entirely. Can you get your needs and wants met with an item that you may have not considered? Be creative and think outside your box with spending and saving your money.
5. Seek out community resources, many non-profits or social service agencies assist with shelter, food, clothing or other resources.