How to Deal With a Sudden Decrease in Income

An emergency fund is a big help when experiencing unexpected income loss.

An emergency fund is a big help when experiencing unexpected income loss.

Dealing with a sudden reduction in income is stressful at any time, and especially in a new marriage or living situation. Instead of panicking or ignoring the problem, talk to your partner openly. Whether caused by a job loss or other issue, taking action immediately can make the difference between successfully adjusting to the new financial situation or succumbing to a common cause of breakups: financial strain.

Apply for assistance programs as soon as possible. Some programs can have long wait periods, so act quickly. If the sudden income decrease was due to loss of a job, apply for unemployment benefits. Information required includes your full name and address, Social Security number, the name and address of your most recent employer and your dates of employment.

Review your monthly expenses as a family. Go over credit card bills and bank statements. It is important for you to discuss the financial situation thoroughly so that you both understand where the money is spent each month. Add up your monthly expenses and calculate the shortfall based on your new reduced income.

Start cutting expenses right away. List items no longer required, such as public transportation, gas costs, restaurant lunches or dry cleaning. Cut your entertainment costs, including gym memberships, cable television and restaurant meals. Use coupons or buy store brands to save on groceries. Eliminate services you can do yourself, such as housecleaning, hairstyling and beauty treatments. Remind yourselves that these cutbacks are temporary.

Contact creditors right away to ask about revising your debt payments. Explaining the situation to your bank or lender as soon as it occurs rather than after a few missed payments shows that you are behaving responsibly, and the creditor is more likely to work with you to revise and review payment options.

Look for ways to boost your income as quickly as possible. Significant cuts to expenses may mean you won't have to replace all of the lost income but just enough to meet your newly trimmed budget. As an alternative or in addition to job-hunting, generate income by selling items you don't use. Start a low-cost home business selling artisan crafts or handmade products, walking dogs, cutting lawns, detailing cars, baby-sitting or writing.


  • Take a good look around your house or apartment for items you can sell quickly in the local classifieds or online. Items such as sports equipment, electronics and small kitchen appliances sell easily and can provide quick cash.


  • Don't ignore what has happened. Take immediate action to cut costs and replace lost income. Financial issues can cause a strain on a relationship if not dealt with openly. Discuss the situation with your partner and work together to deal with the decrease in income.

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About the Author

A former financial adviser with more than a decade of experience in personal finance and small business banking, Sarita Harbour is a professional writer specializing in personal finance, small business, technology, and content marketing techniques. Her writing appears online at sites such as Yahoo! Homes and Bob Vila. Harbour holds a bachelor's degree in psychology and computer science from the University of Guelph and the Personal Financial Planning designation from the Institute of Canadian Bankers.

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