Guidance if your income drops in turbulent times

Guidance if your income drops

There is very little guidance out there on what to do about your financial situation if suddenly this is impacted. And decent real guidance if your income drops.

Your income may drop if you are ill or in self-isolation. Particularly if your company policy is statutory sick pay. Let’s talk numbers. Statutory sick pay if you are employed is now available from day 1, and it is £94.25 per week.

Statutory sick pay for the self-employed available via the universal credit system will be eligible to £73 per week.

These are small sums of money and are likely to be much less than you are earning on a weekly basis. And the money might take longer to receive, particularly if claiming through universal credit.

Operation conserve cash. Follow these steps to avoid getting yourself into debt.

Emergency Savings

Hopefully you have a stash of emergency savings to get you through a few weeks or however long this virus and its impacts last. But lets face facts according to the Independent more than 1 in 4 of us don’t have an emergency fund. They did a survey a while back and found 28% of people didn’t have an emergency fund. Read this if your savings are non-existent.

Take a good look at your spending and stop any non-essential spending.

We all fritter money away and this needs to stop. Buying a coffee needs to stop, a lunchtime sandwich needs to stop, a daily newspaper, an afternoon chocolate bar. An after-work drink or impulse purchase on Amazon. Sorry to be bearer of bad news but it needs to stop (for the short term during uncertain income times).

Cook from Scratch using store cupboard ingredients. Work through the freezer.

I know that I have maybe two weeks’ worth of food in the freezer, what about you. If you were creative there are lots of meals to be made from beef mince, frozen vegetables, chicken breasts, left over cottage pie.

Use basic store cupboard ingredients from Aldi or Lidl (to save even more) to create simple food, soups, pasta, pies, rice dishes, casseroles, curries. My fellow money saving friend Thrifty Lesley has hundreds of incredible recipes on her website that are using brilliant basics and will save you tons. Or check out my 15 packed lunches for less than £10!

Guidance if your income drops

Do a bank account and direct debit audit

Go through your bank account and check that every direct debit you pay for is absolutely an essential. Switch off things like Netflix and Amazon Prime, I promise you there are hundreds of hours of great stuff on iPlayer you can watch. Or maybe get rid of them all, TV license as well.

The gym membership can be cancelled, go running and watch free YouTube tutorials. Turn off magazine and newspaper subscriptions, switch off that dish washer or boiler insurance that you have been paying for three years.

Now is the time to turn off charity contributions and savings into children’s savings accounts. Maybe you have some autosave apps, switch these off.

Guidance if your income drops

Check each of your essential direct debits, are you on the best deal.

If you have been with same provider of energy, broadband, TV, mobile phone, insurance it will be worth giving them a call to check that you are on the best deal. If you are out of contract you will likely be able to switch immediately to a better deal with the same company and save straight away.

My energy company is Octopus and I have contacted them several times when in contract to check I was on the best deal with them. If I wasn’t, they have moved me to better deal. Broadband deals can be bettered almost certainly if you are out of contract. Mobile phone deals can always be bettered if you are out of contract. Moving to a SIM only contract can save you so much. A friend recently messaged me (after reading my website) saying she saved a huge £60 a month doing this.

Also check any accounts where you might have built up a credit in your account. Do you have money sat in your energy account that you can release to your bank account? Maybe you have some cash back earned and sat there ready to move to your bank account?

Call in your debts and raid the piggy bank/money jar

DO you have anyone who owes you money? Now is the time to have that conversation and call in that money. Let’s face it you need it more than them. Do you collect coins in a jar? I know I do, and it been sat on the kitchen windowsill for two years, not really gaining much money as I don’t tend to use cash anymore. Now is the time to add it up and cash it in at the bank.

Guidance if your income drops

Raid any rewards accounts that you may have.

Hands up if you use loads of reward apps and cards in your favourite shops. Check you Nectar points, your Boots advantage cards, your Tesco Clubcard points. Cash them all in to give you a helping hand with essential shopping bits. Check out you balance on the Costa app, or the MacDonald’s app. Get your treats via freebies that you have saved up from your loyalty.

If you still need more money..

If you still need money after doing all of these things then you might need to access some short term credit, go read this post where I have listed lots of ideas to get help and ways to access low interest debt in my post’ help I need emergency cash.

These are all super quick ways to get at money. If you’ve not done any of these for a few years there is so much you could save, particularly when it comes to looking at your essential monthly bills. I urge you to go do this and really hope that your income doesn’t drop, but better to be prepared and have this knowledge.

This post contains affiliate links, it’s a way of supplementing my income so I can write this free content for you. This in no way affects the price you pay.

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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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