If you have been in full-time employment for a long time you get used to a standard of living. That standard of living can suddenly be cut short if you suffer from a drop in income due to ill health, unemployment, or pregnancy.
If you find yourself in a situation of reduced income you need to start making some hard decisions. It is time to pull in your belt. But being frugal isn’t the only way of dealing with a loss of income, there are some practical ways of reducing your outgoings as well which will have a huge impact on your books at the end of each month. Here are some tips on helping you to balance tough times.
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Unnecessary spending; now is the time to review your spending habits and work out what fat could be cut from the monthly household outgoings. Consider home treatments instead of a trip to the salon, running one car instead of two and profiting on the sale of the other, run in the park instead of those expensive gym memberships. There are lots of ways to cut costs so be ruthless and snip away.
Don’t be tempted to borrow money
If you are in a financial hole it is all too easy to borrow money to plug it but this will just add to the problem in the long term as you add debt repayment to your monthly outgoings.
Consolidating debt
If you have credit cards, loans, and other unsecured debts this might be the time to consider consolidation as a way of cutting down the monthly outgoings. This can also help keep your credit score buoyant. Check the options available to you because there are lots of different ways to bring debt into line and not all of them will have favorable rates. The last thing you need is to add more interest to your financial challenges.
Ask for help
Seeking the help of a professional financial advisor can lighten the load and share the burden. It’s nice having someone working on your side and they may see something in your finances that you didn’t that could help you stay afloat until your income gets back on an even keel.
Consider your options
As well as looking for ways to reduce your outgoings you should be considering the options for bringing money in. If you are unemployed look for employment, if you’re unwell turn a hobby into something you can be paid for – be creative with your ideas for making money and as long as it is legal it will give you a sense of achievement as you take action to move your financial problems forward.
Don’t be too hard on yourself
It is all too easy to blame ourselves when we land in financial difficulty. Take a more positive attitude and look for the opportunities this might present in terms of a potential career change or a chance to reduce spending and adopt a better financial habit. If you stay positive then you will see a positive step towards financial freedom
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