Forbes recently reported that 54% of Americans struggle with their finances. That means 135 million people in the USA alone are experiencing some type of financial difficulty – and that data was collected just before the COVID-19 crisis. It is fair to say that anyone with a money problem is by no means alone.
One of the common causes of money problems is losing a source of income, usually from employment. Unemployment rates have risen globally since COVID-19 and Reuters reported that South Africa’s unemployment rate reached a record high of 30.1% before the pandemic even began.
So, what should you do when you lose your income? It’s all about immediate damage control.
1. Register for State Support
Not every country offers financial support for people out of work and looking for a job, but many do. One of the first things to do if you lose your job is to register for job seeking support. Some countries have a buffer period between applying and getting paid, so it is paramount that you do this quickly.
2. Cancel or Pause Luxuries
We live with little luxuries, and we deserve them. Maybe yours is a premium streaming subscription, a flashy gym membership, monthly massage packages or simply a magazine subscription. Whatever it is, it is probably time to cancel or pause these luxuries and keep your money for the necessities until you regain your income.
3. Contact Your Creditors
Some people may rely on their employment income to pay off existing debts. Without their main income, they could default on payments and go into further debt, causing significant stress and anxiety. One creditor that has experience dealing with this situation is Wonga, and they have some top advice when facing a loss of income with ongoing debts.
They suggest contacting all your creditors immediately because they may be able to help by adjusting existing repayment agreements based on your new lower income. They also suggest making debt repayments using the snowball method. This is where you aim to pay off one debt at a time but still make minimum repayments across all debts.
4. Implement Money Saving Advice
There is so much money saving advice out there. From buying a flask to keep excess boiled water hot to making a grocery list before you go to the store so you don’t buy frivolously, these are all good tips that add up over time. Jump online and start searching for the best money saving tips around. You might just be surprised at how creative and how many there really are.
5. Stay Busy and Productive
Last but by no means least, it is crucial that you stay productive during this time to get yourself back on track. That means updating your CV, cleaning up your social media footprint, applying for jobs – and even staying fit for your mental health. If you cancelled your gym membership, then pound the pavement instead. And don’t forget that free online yoga classes are in abundance online.
Do these five things after losing a source of income for optimum damage control!
