Tips For Helping Families Cope With a Lower or Disappearing Income
By: Lynda Coker
Tags: Money, Budget, Money Management, Preparation, Lifestyle

Tips For Helping Families Cope With a Lower or Disappearing Income

Image by Markus Winkler from Pixabay

Losing your job is like having your identity stolen, like having what defined you run through a paper shredder. After a while the despair gets you, and it gets you good.~Author: Eric Jerome Dickey~

The odds are very good that if you haven’t yet been affected by an economic downhill spiral, you’re getting closer by the day…

No one in the globally connected economy we live in is isolated from the prospects of losing a job or business. Many are finding new employment but at much lower salaries. And some are having difficulty finding any type of employment while dealing with inflated prices on daily necessities.

What can we expect in 2021

Following a steep decline in early 2020, the world economy rode a rebound that began in May and remains on track to surpass prepandemic GDP levels by the end of this year — setting the stage for strong post-recovery growth in 2021. ~Morgan Stanley Projects The Conference Board has generated three potential recovery scenarios based on specific sets of assumptions. The Conference Board Economic Forecast for the US Economy

If you’ve lived more than three decades, you’ve seen some of these kinds of projections fall extremely short of expectations. We can all hope for a strong economic recovery but the course of wisdom is to be prepared for the worst-case scenario.

When for so long you can’t get a job for reasons that seem specious, you you finally do have it, you are constantly afraid of losing it.

~Author: Jessica Savitch~

Personal economic crisis strategy

As individuals, we need an economic plan firmly in place for possible downtrends that can affect our families. And some strategies can be implemented early to make coping with the fluctuating economy easier to deal with. Practical wisdom or good old common sense can produce small miracles if applied at the right time and in the right way.

Adjust your mindset first

It’s time to take the blinders off and view the unstable condition of the main systems we live under — political, economic, religious, and societal. Which of these do you consider 100% safe and stable?

A crisis in just one can rock an individual’s world. In 2020, we witnessed what can happen when several serious issues arose in the same period of time. Health crisis, societal injustice, food shortages, political upheaval, and the list goes on. Could the situation have been worse? YES. All it takes is the right catalyst and our world as we know it can turn inside out.

It’s a sad fact that a large part of society lives with their head in the sand. They live in denial of any issue that inconveniences them or changes their accepted normal.

My own country, the USA, is a good example of that. So many people ignore the Covid-19 threat. They don’t want to be told to wear masks. They don’t want to be told not to gather in large groups. They don’t want to be told to practice social distancing. They don’t want to restrict travel and unnecessary activities. In complete arrogance and disregard for the welfare of themselves and others, many demand the right to live their life any way they choose at the expense of society-at-large.

With eyes wide open, one can read the ‘handwriting-on-the-wall’!

Said to mean that there are clear signs that something will fail or no longer exist ~Cambridge Dictionary

Seeing the possibility of critical times ahead, isn’t it wise to adjust our attitudes to give us the best chance to stay afloat.

Add up the numbers

When was the last time you added up the numbers? If you lost your income or had it reduced 30–50% overnight, how long could you pay your existing bills, utility, and food costs? The numbers are sometimes shocking but necessary for us to see the reality of what could happen in the future.

In our household, we always strived to have 3–6 months' worth of living expenses in our savings account. Twice, my husband was laid off from his job and we were able to maintain our home and cars when others were forced to sell those items to exist. We paid extra on our utilities each month until we accumulated credit with those companies that would get us by for several months. And we kept our credit card buying to a bare minimum, not throwing away money on interest.

Simplify now instead of losing everything later

This is a personal choice that isn’t easy to do but pays big in the long run. Adjusting one's lifestyle makes practical sense in today’s economy. A smaller home with modest payments may be easier to keep when things get bad financially. The same goes for a modest vehicle, etc.

Forced downsizing is emotionally devastating and can be damaging to family relationships. Accomplishing the downsizing because it’s the smart thing to do before a crisis will make that transition much easier. It also allows time for adjusting to a lower lifestyle level. Learning to be content and happy without a materialistic way of living has way more benefits than drawbacks!

Conclusion

No matter how you decide to cope with a financial downturn, being informed and prepared are two essential things everyone needs to acquire and do NOW!