Loss of Income

It's challenging, to say the least, not knowing when your next paycheque will arrive or if, in fact, you will get another paycheque. If you suddenly were to lose your primary source of income because you lost your job, became sick or due to labour issues, where would you be? If you've planned for something like this, you might have an emergency fund you can draw on. You know what will also help? Some good, common sense knowledge and advice from people who care. 

Apply for benefits now. You could be entitled to employment benefits, insurance coverage, or union benefits, but there's a waiting period before they start paying out. Apply as soon as you can so you start receiving benefits before things get desperate. 

Handle health issues. If you had a benefits plan through your employer, find out what coverage you continue to have, when it ends and what your time limits are on submitting benefits claims. Use what benefits you have now (i.e. for dental issues, eyewear, prescriptions) rather than paying the full cost later, yourself.

Take heart. It's common to be embarrassed about a loss of income. You might not even want to tell those closest to you. Pride or fear of embarrassment can make you spend money just to hide your troubles. It's better to hold back, take a breath, and talk about your situation with someone you love or respect. There is no shame in seeking community counselling, either. It's there for you; you're not alone.

How cash liquid are you? What do you need to do to make your money available? If you have sellable assets, think about what items you could sell to pay your bills (but please talk to a family member before making rash decisions).

Ask for financial advice. Daily decisions need to be made and some could affect your future. You don't need to make them alone. Come in and talk to an ACU financial advisor; you might be able to delay payments, access insurance coverage, minimize your investment or retirement contributions, or apply for strike assistance.

Sit down and make a budget. By knowing exactly where your money is going, you can see what everything is costing and how you can trim. Reduce your spending by cancelling things that aren't necessary, like cable or eating out. Remind yourself that these are only temporary measures. Find savings by adjusting your vehicle insurance or parking it altogether. Replace costly activities with free activities. Decide what you need in your life, as opposed to what you "want".

"Free" is a still a good word. Check out what free entertainment and activities are happening in your community. 

Put your credit cards away. You may be tempted to use your credit cards to pay for things now, thinking that you'll easily pay them off later when you're employed again. High-interest credit card debt is the last thing you need. Paying off cards later could comprimise your ability to save money or pay bills and you could end up in serious financial trouble.

File your taxes. By filing your taxes, you can get all the benefits you're entitled to, such as GST, Child Care Benefits, Old Age Security and more. Your lowered income means you will likely get a return. Also, by filing your taxes you become eligible for grants, bonds and subsidies that you wouldn't be able to access otherwise.

Don't touch your investments. Dipping into your registered retirement plans or other savings carries some steep costs. If you're cutting expenses the right way, it's unlikely you'll have to cash in your investments. Please talk to your ACU financial advisor, first.

If things get really tough

Prioritize your payments. First, pay your mortgage and keep up with your basic utilities. And make sure you can cover your income tax and property taxes. If you're making loan payments for a vehicle, think through how necessary it is in your current situation. Most importantly, don't wait for the bills to pile up before taking action. Rather than waiting for the creditors to call and write (and you know they will), swallow your pride, talk to your credit holders and make suitable arrangements for payment. Foreclosures and debt collectors are bad news; your ACU financial advisor can give you some options that you might not have thought of.

Look for a temporary source of income. Having a temporary or part-time job can be enough to keep your head above water, with the added benefit of knowing you're taking care of yourself and your family. Although looking for a "career" job is still a high priority, temporary work can be a lifesaver. Think about other sources of cash, like a garage sale, freelance work, odd jobs like yard work, and so on.

Life will get better again.

 

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