By Christi Posner

Suddenly facing reduced income is one of the top reasons people ask for help with debt. You never expect it, and then all of a sudden you’re laid off, hurt on the job, forced to take a lower paying job, or confronted with health issues.

If you had to face reduced income tomorrow, what regrets would you have? Some people may wish they had been tracking their expenses better and living on a personal monthly budget while things were good. Others may regret not saving money, or not paying off credit card debt while they had the chance.

Regardless if your income is steady right now, has already dropped, or you feel like you’re over your head in debt, there are three things you should do to handle reduced income:

Pay Off Debts & Ask for Help Sooner Than Later

Paying off debt is hard; trying to pay off debts with less income is even harder. Start by creating a list of all of your debts, and then learn how to get out of debt and stay out of debt. This may mean paying the highest interest rate credit cards off first, consolidating your debts, or asking for help from a non profit credit counselling organization. But no matter what it takes, don’t wait until it’s too late to ask for help.

Learn How to Save Money Before You Have Reduced or Low Income

Reduced income can happen at any time, so saving money is paramount to dealing with that kind of emergency. To figure out how much money you can afford to save, start by creating a monthly budget. If you’re unsure how much you’re spending right now, try tracking your expenses with a monthly expense tracker first.

When you create your personal budget, remember to include your fixed monthly expenses (rent, electricity, etc.), your variable expenses (groceries, entertainment, etc.) and also irregular expenses (Christmas gifts, annual taxes, etc.). Irregular expenses need to be saved for in advance – tally up the annual cost and divide by the number of paycheques until the amount is due to figure out how much you should be saving.

Your budget should also include emergency savings, for situations just like facing reduced income. If you were laid off tomorrow, you would love to have some savings in your pocket for financial relief.

Make saving money a priority before you are faced with reduced income. Your future self will thank you!

Don’t Live Off Credit – If You Can’t Pay Off Credit Cards, It’s OK to Ask For Help

Don’t live off credit; not now, not when things go bad, not ever. When people use their credit cards for living expenses, they often tell themselves that it’s just to get by for a little while. A few weeks can easily turn into a few months (or years), and out of nowhere they’re stuck and can’t pay off their credit card debt.

The key is to adjust your spending in relation to your income and to avoid living beyond your means. If you’re facing reduced income, take steps immediately to bring your spending in line with the reduced level of income you’re expecting.

Get Help Dealing With Reduced Income from a Non Profit Credit Counselling Organization – Debt Help, Saving Money, Tracking Expenses, Budgeting and Credit

If things are going well for you and you’d like help with budgeting or tracking money to save money for an emergency like reduced income, or if you need debt or credit help because you’re already dealing with reduced income, contact a non profit credit counselling organization.

Reduced income is a reality that many of us will face in our lives, so taking care of your debt, savings, and living on a budget now will help you from dealing with a financial disaster in your future.

Have you dealt with reduced income? Do you wish you had done something differently while things were going good? If so, let us know your experience in the comments below.