Anyone who has been through a financial downturn knows that handling it isn’t easy. If you have recently lost a job, had hours significantly cut, or have reduced earnings for some other reason, you are probably wondering about how to survive until you can bring your income back up. Here are some methods for cutting costs when your income is slashed.
Analyze Your Bills
The first thing you need to do when your income is drastically reduced is to take a look at all of your bills. What can you live without? What expenses can help you in the search for additional income or a new job? What can you get rid of to make extra money? What is the least amount of money you can live on? Take an overall and realistic assessment of your income, bills, assets and needs to get a clear picture about your next moves.
Pull the Plug on Subscriptions
Cut the obvious bills first — the cable or satellite payment, ditch the landline, magazine subscriptions, movie services, and anything else that is strictly for pleasure. If it isn’t a link to a potential source of income, cut it. You can still find free entertainment online, and you could have a lot more fun enjoying your favorite programs at a friend’s house, anyway.
Weigh Your Options
You’ll want to keep Internet access for the job search, but you may want to down grade to a lower speed plan if you’re in a high tier plan. You don’t need to slump down to dial-up, and you don’t want the added cost of a landline, but you need every extra dollar you can find right now. You may run into slight delays when streaming movies or videos, but you probably won’t notice any difference loading most web pages or email.
Look at your Energy Bills
Start looking at ways you can conserve energy around the home and in your other daily activities to cut your energy bills. Turn off lights, unplug appliances that drain energy when they aren’t in use, and don’t leave the TV on when you’re not watching. The refrigerator is one of the biggest drains on energy, so raise the temperature just a bit if possible. Switch to energy-efficient bulbs and be cautious about raising or lowering the indoor temperature.
Plan your car trips for efficiency and make fewer trips to save on gas in your car.
Brown bag it
Pack your lunch if you’re still working, and make all of your food at home from scratch whether you are working or not. If you’re already doing these things, then it’s time to start shopping for more frugal ingredients.
Use some of the extra time you may have by looking for coupons and bargains on thrifty foods, and shop at low-priced stores. If you’re careful and get recipe-savvy, you should still be able to buy healthy ingredients for quality, tasty meals.
What do you have sitting around that could be sold for extra income? Spend some time on eBay researching some of the items you have to see the amount for which they have sold, or if they have sold at all. Search for an item and then look at the column on the left-hand side. Find the option to “Search only” and click “Completed listings” to get a feel whether or not your goods are hot property. Pay attention to the item details to see if certain features garner higher prices or if those items go unsold. Do the research and try to be realistic about will sell and for what amount.
If you find that certain items do well on eBay, see if you can find them for a much lower price at local thrift stores, but venture cautiously. It doesn’t make sense to invest in goods that won’t sell for more than you paid, but many people are able to make very good side income on eBay or Craigslist.
One of the most important things anyone can do when finances take a turn for the worse is to keep a positive attitude. If you are focused on improving your situation and keeping a positive attitude, the people you encounter are going to be more receptive to you, and opportunities will come your way. Be ready to jump on those opportunities with a smile and a can-do attitude and things will turn around much more quickly than when facing life with a grouchy disposition.
Shirley is a staff writer for MyBankTracker who covers personal finance trends, money habits, mortgages and foreclosures.