Causes of loss of income
Whether you are an employee on a permanent contract, an employee with a fixed-term contract (CDD) or that you multiply more precarious contracts (such as temporary work), no one is immune to loss of income sudden.
Because of an economic layoff, an accident or even, in a less dark register, a professional retraining, your income can suddenly change. Whatever the reason, the result is as follows: you will have to deal with a reduced budget in the coming months. Don’t panic, take a look at your finances and study together the solutions to reduce the impact of this loss.
What methods are available to you to compensate for a loss of income?
First step, faced with a loss of income, learn about your rights. Depending on the source of the loss, you may be able to benefit from state aid. If you are sick, it will be Social Security benefits, if you are dismissed, unemployment benefit…
The only downside of these aids: like any administrative process, they require the creation of files. They can therefore take up to several months to be processed. Be aware that in most cases, the date of the first filing will be taken. You will therefore be reimbursed the amounts due to you during the processing period.
How to reduce expenses to a minimum?
Besides aid, it is expenditure that must be tackled. It is important to reduce them, in order to adapt them to your new income. Many organizations have programs designed to accommodate clients in financial difficulty.
Contact your creditors. With a certificate proving your situation, EDF offers, for example, a First Necessity rate. Even if you do not think you can get a reduction in your charges, it is always good to keep creditors informed during financial difficulties.
They will be all the more inclined to grant you payment terms if you do not put them before the fait accompli. Here are some expense items that you can easily reduce:
- Credit monthly payments. If you have a loan in the process of being repaid, you can renegotiate it and reduce your monthly payments. You can also consider consolidating credits and completely reschedule your repayment. Certain contracts allow the repayment to be paused and to be shifted accordingly for one month or several months;
- Reduce your daily expenses. You will not be able to stop eating, of course, but you can for example consider stopping a satellite TV subscription, or reduce your consumption of video games, or even music or cinema offers. A good opportunity to find offers at lower prices, sometimes with better value for money;
- Talk to your banker. Your financial advisor can suggest specific solutions to make up for your lack of income. He can increase your overdraft or offer you a bank card suited to your needs.
How to anticipate a possible loss of income?
We have seen the solutions to act after a loss of income. It is also possible to anticipate these difficulties. If you cannot foresee an illness or a job loss, you can however take some security measures today as far as your finances are concerned.
Establishing a budget for each of its monthly expenses and recording its expenses is therefore a step in the right direction. This eliminates any unnecessary purchases and takes stock of its resources.
Thanks to this clear vision of your budget, you will be able to reserve part of your income to place it on a savings product and avoid overdrafts. Even if you manage to save only a few USD every month, they will be available in the event of a hard blow. Finally, limit your debt and for each of your credits remember to check the extent of your insurance. There are no small savings.