To recover your income from its fall is easy if you manage your expenses wisely while tolerating your emotional downfall. In this article, we have focused on some “Methods to recover your Income when it drops down”.
Without any income, it’s difficult to survive. And this losing income has become a common phenomenon for everyone during the last two years because of this pandemic. According to the Pew Research Centre, 44% of U.S adults said that they have been experienced job loss (Temporarily) or reduction in payments during this pandemic period and not only them, Hispanic and Asian adults also declare the same issue.
Even with the pay cut for a short period, people are facing a huge problem in settling down the major expenses including food and housing, everyday expenses and monthly bills. The certified financial planner Manisha Thakor, founder of MoneyZen financial educational consultancy in Portland, Oregon, states, having good knowledge of the allowances and be aware not to delay them is the best way to face a post-pay cut.
She says your lifestyle might change so that your expenses too may also grow up with that. And if you have any idea about your previous expenses and found any negative things, take immediate action and try to fix them. Further, she mentioned that to keep in mind the notion, immediate actions over any negative action in your expenses will help you to have a rich life soon.
Listen to your emotions
Founder of the Money Smart Latina website, Athena Valentine Lent said, it’s okay to feel low, appreciate you, make yourself strong thinking you are going through it anyhow. She thinks a lot of people do not admit such things to themselves.
Founder of the Frugality website, Daisy Luther said, you may grieve on your reduction in income or loss of a job when you remind yourselves about your previous life. She further stated that she too underwent such things before as she was born for a luxurious family and never heard ‘we can’t afford that any day’ but she got divorced and had to admit herself that her life had changed. She lost many things, couldn’t go out to eat pizza every Friday night with her kids and had to stop visiting nail salons plus a lost gym membership. Her advice was “Give yourself some time to feel down and focus on settling your life again”.
Review your spending
Thakor said, check your spending and find the unnecessary expenses, cut them off. He also said any expenses don’t bring you happiness, such as spending for the cable bills, activities for kids which lead you to weigh “ Am I look better than them?” – get away from that wrong mindset.
She added, find the best way to make your work done without spending too much on unnecessary things, such as “you want internet, not a cable”,” you want a phone but not extra things on it”,” you want Netflix but you can go to the library”. Don’t spend extra money on things that you don’t really need.
Reduce spending for foods.
Valerie Rind said food is another major spending on your list. The author of “Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin,” experienced a huge income loss when she changed her job 16 years back. Thus, she decided to stop going out for meals, although she prefers it and is not good at cooking. She also altered her shopping habit, stop buying $4 orange juice, use crock pots to have meals which also help to keep leftovers in the refrigerator.
She was inspired to cook by a Tik Tok chef who makes small videos on cooking. It made cooking easy and interesting. She mentioned her favourite chef’s name @thatdudecan cook.
Limit your expectations
Thakor advised you to ask yourself how much you can afford to make your expectations true. Such as ask yourself whether you are able to run two vehicles or decides to have only one car. Some people drive expensive vehicles which eat more from their salary, looked at preowned cars. It’s not difficult to manage income loss, even a temporary one too without spending too much on your vehicle each month.
Follow the method of being frugal
Luther said to be more frugal. When it comes to purchasing food items, home décor or an accessory, she advised you to ask yourself whether you can make it less than the amount you are spending for purchasing it.
Save to use it next time
If you have already used your emergency fund or don’t have one, start saving some amount to use it in an emergency. Thakor advised you to save $2000 as your emergency fund goal and to continue it. But even $500 is enough for you to use in a financial crisis.
If you see any sign of financial crisis in the future, start collecting money. Lent suggests trying to make extra money from starting an online business or ride-sharing, doing freelance work to your ability.
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