However well you plan your life, some things are unforeseeable and may result in a sudden loss of income. Think illness, redundancy, divorce, or more recently, a worldwide health pandemic.

Such events are highly stressful on their own but combined with a loss in income, are overwhelmingly worrying. You may feel you no longer have control over your life and are frightened as to what the future holds for you and your family.

Knowing what to do and acting quickly is important to minimise damage and to help you get back on track as soon as possible.

Here are our suggestions to survive a sudden loss of income, both emotionally and practically.


As hard as it might be, don’t go into panic mode. The initial shock of loss of income is natural and must be taken onboard, however panicking will not help. Know that there is a way through this situation however dismal it may seem here and now. Panicking will prevent you from seeing reason and finding sensible solutions at this crucial time.


Acting fast is important, but it is equally important not to make decisions in the spur of the moment that might later prove to be the wrong ones. It’s great to want to improve the situation but in the wake of a crisis you may not be thinking straight or have done the necessary homework. Let the dust settle first and re-consider your ideas in a day or two.


If you have an emergency fund, now it the time to use it. However, money never goes as far as we would like it to, so be careful. Use it only for absolute necessities and on a temporary basis while you figure out your next more. Resolve to top-up the fund when you have found your financial feet as you may need it again in the future.


Whenever there is a change to your financial circumstances you need to review and update your personal budget. If you experience a big drop or loss of income it can be confronting to face the reality of the figures but it is absolutely necessary. Update your new income amount then work out exactly what you need to make up the difference and afford your expenses. Highlight any unnecessary expenses or areas where you can afford to cut back.

Now is a good time to download a free personal finance app to your phone so you can track your money and ensure none is wasted.


If you have a stack of bills to pay and/or debt to manage, it’s time to prioritise. Focus on getting bills paid on time so you receive the due-date reduction but don’t pay too soon in case you need the money elsewhere. Or, if you are unable to make the payment, call the service and ask for an extension or an interest-free payment plan. Work out what needs to be dealt with now and what can wait.


Your personal expenses will be a mix of necessities and luxuries. Work through them all and decide what you can do without for a temporary period of time. Payments like Spotify, gym membership and Netflix can add up and if paused will save you a significant sum each month. Also, following simple money saving tips to reduce the cost of utilities, fuel, food and other essentials is very important during this time.


If you have debt, consider talking to an expert about consolidation to bring down the regular payments or make provisions to put your payments on hold temporarily if this is possible. Contact your home lender and adjust your mortgage repayments to the minimum amount. Don’t ignore your debt and create further problems, face it head on and find solutions.


Double check that you didn’t start paying into a job loss insurance fund at some point in the past. This is also known as supplemental unemployment insurance. It will payout a lump sum should you get laid-off or close a business. Now is the time to make that claim!


Depending on the reason for your loss of income, you are hopefully in a position to start generating money again as soon as possible. This might mean considering alternative forms of income. As well as looking for work in your usual career areas, think about contract or freelance work. Or you could do something totally different to your normal line of work as a stop-gap or consider a complete career change.


Generally, there is government assistance of some kind following a loss of income. Take the time to call Centrelink and explain your situation. Update your estimated earnings on the website or your app. Follow the advice given to you regarding further resources and support to get back to work or apply for longer-term benefits.


Reaching out for support it one of the most proactive things you can do when you experience a loss of income. Whether it is to a friend or family member who can help you plan what to do or a financial expert who can advise on managing your money over the next few months.

Or, if you are emotionally and/or mentally drained or experiencing feelings of depression or anxiety, book an appointment with your GP for support. You need to be the strongest, healthiest version of yourself to overcome this period and get back on track.

Posted by Belinda Eldridge
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