How to Survive When Your Income Is Cut in Half

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Worried couple doing their accounts in the living room at home

Life can sometimes take an unexpected turn for the worse. And, then suddenly you find yourself faced with a substantial loss of your household income.  It may be you lost your job or your spouse now has an injury or an illness that prevents them from working. Regardless of the reason, you still have to pay your bills and now on a lot less than you’re accustomed to. The good news is that many people find themselves in your situation each year and while the situation is not ideal, they adjust and live a comfortable life.

Finding Out Your Debt

The first thing you need to do is to compile a list of your debt to see exactly what you owe out to creditors. Once you have the list complete you’ll know exactly the amount of money you need each month to continue to make the payments.

Moving Forward

If after looking over your debt you find that you fall short, don’t panic. This is the start of a budget and designed to give you an idea of the money you owe. The next step is to contact your creditors and see if you can reduce the monthly payments. A few dollars here and there may not seem like a lot, but add a few of them together and it can free up a hundred or so each month.

Finding Additional Money

You may still need to come up with more money to cover all your expenses and thankfully, there are several ways to do this. If your credit is in good standing and you have a mortgage, you can try to refinance the loan. Refinancing can give you a few thousands to pay down your existing debt and it can also lower your current mortgage payment. If you don’t have the money to cover the closing costs you can always apply for a small installment loan through an online company. For instance, MaxLend loans are low monthly installment loans that use different guidelines during the approval process, increasing your odds of obtaining the loan.

Living Frugal

Once you have the monthly bills squared away, paying down the debt and living within your means is imperative to your maintaining a quality lifestyle. The good news is that adopting a frugal lifestyle doesn’t mean that you do without; it simply means that you change your spending habits and spend money wisely. You eat in more often and learn how to do the small fun things together as a family. Parks, museums and the beach are great examples of spending quality time together without a lot of expense attached to it.

Paying without Charging

For many people, any purchase, large or small usually ends up on a credit card. The problem with that is that unless you have the money to pay for your purchases in full each month, you’ll also pay interest. The hardest part is transitioning to using cash. However, the upside is you’ll shop smarter and you won’t receive a bill in the mail.

Paying Off the Debt Faster

If you want to free up money to feel more at ease, you can always take on a second job, even if only for a short while to eliminate some of the debt. You can work part-time at the local store, find employment online, or choose to offer your services if you possess special skills.

Sometimes despite your best efforts, you just can’t make ends meet on a single salary when the debt created is too much. In this case, you can try to reconsolidate the debt through a company that specializes in debt relief, or you may decide that filing bankruptcy is the only solution that will give you a fresh start.