Every Day

What If You Lost Your Income?

A company that has been in business for years in a town in our area announced today that they will be starting factory shutdown next week and will cease operations. They say they will only need 10 employees of the 150-175 they currently have for the shutdown. That is a lot of employees who will be out of a job next week. Even though the economy is good and workers looking for employment are in short supply, these workers will most likely find it hard to make the wages that they currently make. Finding that new job may force them to move.

So what should you do if you lose your job or even part of your income that you have counted on. I can only tell you what I would do if I was in those circumstances.

Before you lost your job or part of your income, I would hope that you have plenty of money saved in case of this emergency. But many people don’t due to many different circumstances. Or if you knew far in advance that you were losing part of your income, you would have had time to save every dollar you could. 

First, I would apply for unemployment. Then I would update my resume. Next I would start searching and applying for as many jobs as I could. Any and all adult household members should be looking for jobs if they are unemployed. Even stay at home Mom’s or Dad’s can find a part time job on weekends or evenings.  

Then, I would cancel as many recurring expenses as I could. Cable TV, extra cellphones, or a home phone would get cancelled. Cancel all magazine subscriptions or any other subscription services that you have such as the newspaper. Then stop the gym memberships or any other memberships that you pay for. You can no longer afford these luxuries. 

Next I would try to lower other expenses like homeowner’s and car insurance by researching who is cheapest but still has an A or B+ rating.

Check to see where the food pantries are. Can you get food stamps? If you have worked almost 10 months in a job, you probably won’t qualify this year but perhaps in January you will. 

Figure out how you can maintain health insurance for you and your family. That is important. When family members were without a job many years ago they used COBRA to keep their health insurance for a couple of months till they found another job. COBRA is not cheap but it is important to not go without it. One injury or illness could wipe you out.

Stop all spending immediately except for necessities. Necessities to me would be food, mortgage payment or rent, house or car insurance, internet service so you can apply for jobs,  transportation or paying for gasoline to drive  to job interviews and the market, utility bills for gas and electric, water and sewer, medical co pays and insurance. You also need just one cellphone or home phone so that you can be reached by companies looking to interview you. Any spares need to be cancelled. The rest are all luxuries.

You shouldn’t spend any money on clothing, entertainment, meals out or anything else. Christmas may have to be celebrated with just a family meal and no gifts. We did this one year when Hubby was hit by a car while walking from the parking lot to his office only 5 weeks after he started a new job. He had no sick time at that point and so we went without pay for a few weeks until he was cleared after surgery to go back to work. We had only had our new home a year so we didn’t really have much savings at that point. We just told everyone that we couldn’t afford to buy gifts that Christmas. We just had a small family gathering with a cheap turkey.

Every expense that isn’t a necessity must be cut! I can’t say that enough. Until you have another job, you spend not one dollar unless it is really necessary.

If your situation is such that you are permanently losing income, then you have to find a way to replace that income and pay your bills. If you have to downsize your home or find and apartment to live in, it is the choice you will have to make. If you have to find a part time job or a way to make up that income, then that is what you have to do.  

Even the amounts you spend on the necessities such as food can be cut with proper planning or couponing.

It isn’t going to be easy but you know that when you get a job it will get better and you won’t always have to be so thrifty.

Feel free to add in comments any other advice that you feel is important in this situation.


8 replies on “What If You Lost Your Income?”

I don't know how many times my husband lost his job when we were first married. I think it was well over 10 years before we had a reliable income. Even then it was too small to support a family. You become very resourceful. I became a serial debtor and resourceful. 🙂

When I was young, I was laid off 65 times in New Jersey! While I could find a job in 3 or 4 hrs in the 1970's, they didn't last long; jobs were moving to Asia or NYC. I remember diluting all fluids in the house, even cutting back on coffee, enlarging my garden pronto, and cutting grass for people while I job hunted, babysitting and taking bottles back to the store for the nickel. ldc

I am not sure you are correct about having to work for ten months to get food stamps. However, I am going to check on that.

When I lost a job and had medical benefits for a month as part of the job, the first thing I did was to get an appointment and had thyroid surgery while I had coverage. The same day I got the first appointment, I refilled all my prescriptions and had another refill just before the end of the month. I made an appointment with food stamps. Those three things stood me in good stead. The same day, I called about subbing and went to fill out paperwork. I was approved in one day.

The second day, I put up flyers to sub and made a ton from that.

I did not have a cell phone or cable, so no problem there. And, I had no subscriptions or memberships to cancel. There was no one else relying on me, and I had no one to rely on. Resume was up to date, and I regularly sent it to universities.

Hi Linda,

I may not be correct so everyone should check for themselves. I have been fortunate enough to never have to rely on food stamps. My understanding was that they are based on how much income you have had for the year but I may be wrong. Each state has requirements so check yours.

Thanks for sharing all of your suggestions.

Hi Liz, this is Chris. This will be a helpful post for the people in your town who are losing their jobs. A few things I would add: 1. Work your contacts for jobs, especially those who are in sales. The good sales people can know of job openings before they are posted. 2. Many churches have benevolent ministries that will help with something like a utility bill, gas, food, etc. Check around, many of them you do not have to be a member of that congregation for them to help.

Hi Chris. I hope everything is well with you. This is a factory that is closing not sure they have sales positions. But for those who lose one and are in sales- good suggestion.

#2 is a terrific idea. I did not know that.

Thanks for sharing.

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