Lost income? Take Action!
- Moni Ora
- Apr 13, 2020
- 3 min read
Updated: Sep 19
Losing our income is incredibly stressful.
We all have bills to pay and mouths to feed - our expenses do not stop.
We have to figure out how we are going to cope, fast.
'What can I do to help myself ?'
Here are some stop-gap measures to minimise the financial impact of sudden change
& buy some time until you can get back on your feet.
Examine your finances - Clarify, Adjust, Monitor
Draft a comprehensive budget to clarify your financial situation and identify pressure points.
Be honest with yourself about all income & outgoings.
Make a list of who you owe money to and how much.
‘What can I go without for now ?’
Adjust your budget. Cut out unnecessary spending to protect what is important to you.
Prioritise the basics, including rent, power, food and other necessities such as phone, transport, required medical expenses and child support payments...
While your income is uncertain, be careful about everyday spending.
Some bills may seem manageable in the short term but you don’t know how long you will be without work, and everything adds up eventually.
Communicate - Talk now to buy 'time'
Talk to creditors - the sooner you phone your creditors the more options they have to help you.
Be bold, be upfront and phone as soon as you realise you are going to miss a payment.
‘Look, this is what’s happened, can we work something out ?’
Be careful not to over-promise.
Ask for ‘time’ so you can make a budget and be sure you can manage the new payment plan.
Work together with your creditor – in a positive & realistic way – for a better outcome.
Explore hardship provisions
Financial service providers are required to have provisions for unexpected hardship.
‘This is unexpected & now I can't afford to pay my bills’
Every creditor has their own processes around hardship so you need to talk to them all separately.
Ask what options are available to you under hardship?
Options might include,
extending the term of the contract and reducing the amount of each payment, or
taking a payment holiday, or
a combination of those two options.
Remember to ask what any changes will mean to the interest and term of your loan.
When it comes to hardship options you need to act promptly - there is a limited window before the options start drying up. Ideally act before any payments are missed, or if you don't see 'it' coming act as soon as you miss a payment.
Check for insurances
Many finance contracts have insurance add-ons which can include ‘loss of income clauses’
Check all of your loans, credit contracts & credit cards.
‘Is there any insurance included in my contract ?’
It costs nothing to ask and it could be helpful if you are covered.
Get advice
Losing your income is an extremely stressful time.
It helps to have someone on your side to support you through a financial crisis.
A financial mentor can help you figure out what needs to be done and support you to do it.
A Financial Mentor can help you to:
tailor a realistic budget
prioritise essentials
check affordability of payment plans
support creditor negotiations
provide a verified budget to prove your financial position
At Moni Ora, we help you plan your money to reach your goals.
Whether you're in crisis, need help managing debt, or want to plan a better future, our Financial Mentors are local and here to support you.
Our service is always confidential and free of charge.
Book your free, confidential appointment now: call 0800 115 370
or
Click here to get in touch
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