Family Finance – Surviving a Loss in Earnings

Feb 14

When one of the earners in a household suddenly finds himself or herself out of work, it can be a devastating blow to the collective finances. However, this scenario is still much better than having no income at all, and there are ways to survive on just one paycheck in the middle of a job search or recovery from an accident. Here’s how you can strategically settle the question of how to match your new spending choices to your new budget.

Don’t cut blindly. Sure, you’ll need to slash your budget if one of you loses a job, but it’s just as important to factor how much you’ll need to cut. Calculate the percentage of your household income was coming from the job that was lost, and then handle your cutting from there. Whatever you save with your new budget should match what you lost.

Find new ways to make money. Losing a job has been the catalyst that many workers needed to start their own businesses. Likewise, you could set up your own business based on what you have expertise in. Suppose you’re good with handling and keeping an account of money, you could apply for a loan and become a lender. Over time, you would maximise the returns for what you had initially invested. Similarly, if you’re good with your hands, you could offer your services as a handyman to those who need help with carpentry, house renovations, landscaping, and more. Remember that thinking of ways to make money on the side can turn into a full-time, independent job. So, find something that is relevant to your skillset as it could mean more than job security for now; it could mean financial prosperity as your new business grows.

Sort out what can go. Your mortgage is a must-have, and so is your auto (if that is the primary mode of transportation to get to and from work). However, there is still room for some concessions in your budget. For example, you can keep Internet, but cable may have to be cut. And eating out is no longer an option, but maybe you can still find enough loose change to rent a movie on Friday nights. It’s important to be both flexible and resourceful when you begin to rethink your spending to make sure you have all of the things you need while sorting out how to keep yourself motivated to save.

Research what rights you have. This applies particularly to employees who have suffered an injury at work. Work accident compensation should be one of your top priorities once you find yourself well enough to plan your finances. You’ll receive government-mandated sick pay in the amount of about 85 a week for several months, and additional compensation from the employer in some cases. Much like seeking fair compensation for work injuries, if a tragedy leads to the loss of a loved one due to negligence, it’s important to remember that you have the right to enlist the services of a Rolling Meadows wrongful death lawyer (if that’s where you live). They can initiate a case on your behalf and work to secure the rightful compensation you deserve. While government-mandated support might provide limited relief, seeking additional compensation through legal assistance can alleviate financial strain in both scenarios.

Seek Professional Help in Exercising Your Rights. As said in the afore-mentioned section, when faced with the task of asserting your rights, it’s wise to seek professional assistance. This holds true in various scenarios, including instances where legal complexities arise. For instance, if you’re involved in a truck accident while working, you might be entitled to compensation for medical expenses, lost wages, and damages. Navigating the intricacies of this process can be daunting, but enlisting the guidance of a skilled attorney can provide clarity and direction. They can help you gather evidence, negotiate with insurance companies, advocate for your rights in court if necessary, and get you the deserved compensation for your injury claim. Put simply, by seeking professional help, you ensure that your rights are comprehensively exercised, potentially leading to a favorable outcome in challenging situations.

Put away the credit cards. When you’ve lost income and you already have credit payments to make, the worst thing you could possibly do is dig yourself even deeper into a credit hole. Operate on a cash-only basis until you can sort out a more permanent solution to your finances. And whatever you do, don’t stop making payments on those credit cards.