Life can be unpredictable.
One day youre managing your finances just fine in a two-income household.
How do you cover your expenses with this reduced income?
How do you pay your bills?
Before the financial panic sets in, here are a few things you’re free to do.
Do not panic, said Michael Gerstman, CEO ofGerstman Financial Group.
Take a moment to breathe.
it’s crucial that you assess where you are financially at that moment.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Take stock of the funds you have set aside for emergencies.
There wont always be a glaring benefit, but its important to evaluate the full picture.
Youre losing a major source of income, but can you also eliminate any regular expenses as a result?
Did you know?
If that describes you, nows the time to actually start a budget.
Withzero-based budgeting, you account for every dollar youre spending.
Thecash envelope systemhelps you adhere to your spending limits.
After a major income loss, its crucial to cut out expenses that arent necessities.
Depending on your situation, you may need to resort to abare-bones budgetwhere youre only covering absolute essentials.
She advises using cash-flow tracking software likeMintorYou Need a Budget to keep track of where your money is going.
Dont just settle with cutting out your discretionary spending.
Take a magnifying glass to your necessary expenses, too.
Can you switch to a less expensive cell phone service or car insurance provider?
Can you cut costs on utilities or call your credit card company toask for a lower interest rate?
It could be taking a second job or finding a gig they can fit into their current schedule.
We also write about variousside gigoptions consider taking abridge jobto get money coming back in.
There are other ways to make extra cash unrelated to employment.
Seek Out Assistance
Asking for help can feel uncomfortable if youre used to handling everything yourself.
But theres nothing wrong withseeking out assistancewhen in need.
Talk to your creditors or service providers if you think youll have trouble paying your bills.
You might qualify for ahardship programthatll give you temporary financial relief.
Your local department of health and human services is another helpful place to turn.
While youre in crisis mode, dont ignore your need for emotional support.
Going from a two-income to a one-income household usually involves greater loss than just money.
That might mean taking out ahome equity line of creditor tapping into yourretirementaccounts, he said.
But Frazier recommends more caution.
You should also be aware of how taking on debt will affect your financial future.
That could be a situation from which you could never recover, Gerstman said.
Nicole Dow is a senior writer at The Penny Hoarder.
No Interest Til Almost 2027?
Balance Transfer = Credit Card Cheat Code
