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How To Reduce The Financial Impact Of Lost Work

Money is pretty essential to our survival, so when our finances take a hit, it can feel like the end of the world.

If you ever find yourself losing out on work because of something like a major illness or accident, one of your first thoughts will probably be about how you’ll cope financially. Being away from work for a long-time can hit your bank account hard, so reducing the impact is vital. Thankfully, there are ways you can do this.

Prioritize your expenses

When it comes to expenses, some things are vital, but others you can definitely live without. Bills and food typically belong in the former category, and these are what need to be prioritized when your workload takes a hit. As nice as it may be to have a gym membership or daily trip to Starbucks, such things have to go on the back burner when money’s tight. It’s not nice having to give up on the ‘luxuries,’ but if something isn’t essential to your survival, you need to re-evaluate if it’s worth the money.

Learn to budget

Depending on the severity of your financial losses, your essential expenses may still be too high for you to keep covering. That’s where budgeting comes in. Do whatever you can to reduce the cost of those essential expenses, such as buying store-brand items at the grocery store. You might only shave off a few cents here and there, but if you also manage to reduce your bills, that money could go a long way.

Consider flexible job options

If you need to bring more money in and you’re physically able to work, a short-term role might help you out. There are a wide variety of positions available in this line of work, most of which don’t require you to have any qualifications or much experience. You could freelance as a bike courier, for instance. This role is popular right now, as the lockdown is leading to an increase in food deliveries. If you choose this option, then you’ll need to pay for everything from your bike to your safety gear. You also need bicycle insurance. Companies like Velosurance can give you a great deal that keeps you safe while you're taking on your exciting new role. Given that they specialize in bicycle insurance, you can trust that you’d be covered if you were ever in a bicycle car accident. Whether it’s for work or pleasure, you know that your bike is safe when you insure with them. 

Borrow money

When you’re low on cash, borrowing money from somewhere else might not seem like the best idea. After all, you have to pay that back eventually, perhaps with extra fees involved. However, if you’re smart about it, some form of loan could be the very solution that you need. Shopping around for something that has reasonable interest fees and favorable terms and conditions is ideal here, especially if you don’t know how long your financial troubles are going to last.

Use retirement money

Retirement plans are in place so that people don’t have to worry about money once they’re too old to work. However, what’s the point of saving money for the future if you’re barely getting by in the present? When times are tough financially, withdrawing from your 401K is usually possible. It’s not without its penalties, as a tax advisor will tell you, but if the situation calls for it, that money could be your salvation.

Speak to your creditors

Sometimes, the best way to solve your problems is to ask for help. You might think that won’t work when it comes to paying creditors, but you may be surprised. If you let them know about your situation, there’s a chance they’ll offer help in the form of extending your payment date or waiving late fees. There’s no assurance they’ll provide assistance, but at least if you ask, they may say yes. Staying silent will only make your problems worse.

Work from home

Obviously, this option is only available if the loss of work comes from your own issues, rather than that of your company. If you’re unable to go out to work, but are still able to do everything at home, it’s worth seeing if your employer will allow for remote working. There’s no reason why something like a broken limb should stop you from doing your job, provided you can still work from your bed. It’s worth seeing if you have any paid sick leave or vacation time that you can make use of if working from home isn’t an option.

Get financial counselling

If you’ve done everything you can think of and still feel like the ground’s going to collapse beneath you, try speaking to a financial counselor. They’ll be able to draw up a plan of action for you, whether your financial issues are a short-term or long-term situation. It’s possible that some of their suggestions may involve difficult sacrifices, but as the experts, they know what it takes to bounce back from problems like this.

Losing a stable income might put you in a panic, but you can get through this. Just try to keep a clear head and think through your options, and everything should work out in the long run. 

How To Reduce The Financial Impact Of Lost Work
Luca Yates
 

Through his work in the SEO and Corporate landscapes, Luca Yates has been on his own personal growth journey. Today, he loves helping others to achieve their goals.