Living Outside Your Means: What Happens When Your Annual Income is Decreased by 85 %
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Although we may do everything in our power to ensure that we have a good paying job, sometimes a situation could arise that decreases your income in a profound way. Whether it is caused from the company going out of business or legal matters force the owner to shut down, you could be faced with making a considerable amount of money less than you had before. However, there are ways that you can help prevent from drowning in debt.
1. Mortgage - Having a place to live should be your number one priority - especially if you have a budding family. If there is no possible way you can keep your home, you may have to look for something else in your price range. However, if you keep your expenses minimized, you could keep your residence even if you go from $75k per year to just over $11,000. Of course, this depends on the monthly payment your home demands.
In some cases, you could move into a smaller home with your new job and sublet your more expensive home. As long as your tenant can pay what is due on the mortgage payment, you can keep the home and make a few dollars extra. If you devise a six-month lease, you could give yourself and your family time to recuperate from the loss of your high paying job while keeping payments current and bypassing foreclosure.
2. Creature Comforts - Foregoing many of your creature comforts may be a necessity in order to decrease living beyond your means. This could include reducing your cable TV, subscriptions to diversionary services such as online gaming, your phone services and your Internet connection. As long as you bear in mind that this is only a temporary setback, you can regain your comforts at a later date. Right now, you need to survive and you don't need a 35MB downstream to watch Netflix - which can be a total of $80 per month between the two when a $25 WiFi connection can help keep you connected to YouTube.
3. Travel Expenses - Even objects as mundane as gasoline can begin to cut heavily into a diminished budget. If at all possible, invest in a bicycle. Not only is it healthier for you to travel, but it could reduce a great amount of gasoline that your vehicle consumes on a daily basis. In some areas, this may not be practical. However, limit the use of your vehicle to only instances that are a necessity to your survival. A night at the club does not play into your survival.
4. Deals - Coupons, deals and discounts may become as regular in your wallet as the cash once was. This is nothing to be ashamed of. In fact, it shows that you are responsible enough to yourself and your family that you're taking initiative to combat your own poverty. Some of these discounts could be enough to allow you to enjoy a locale on occasion that you once took for granted.
The faster you respond to the lack of income, the better off you'll be if you're ever in a similar situation. Never assume that you will find a job making the same amount of money you once were. It's OK to hope and dream for the best, but it will save you a great deal of stress by preparing for the worst.
About the Author:
This article is contributed by Madoline Hatter. Madoline is a freelance writer and blog junkie from ChangeOfAddressForm.com. You can reach her at: m.hatter12@gmail.com.
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