How to manage your money when your income is not stable

So far 2020 has been a year of challenges and unpredictability, and there is no end in sight.  There are so many hard working people out there who have lost their jobs and are unsure how they will be able to provide for their families moving forward.  If you’ve found yourself in this position take comfort in knowing there are some things you can do to get by until you find yourself on financially stable ground again.  Here are 5 things you can do to manage your money when your income is not stable.

1. Prioritize your 4 walls

The 4 walls of necessity are food, shelter and utilities, transportation, and clothing.  Take a look at your current expenses.  If they do not fall into one of these 4 categories, they can be cut for now.  For more information on the 4 walls check out my blog post How to Prioritize Expenses during a Financial Crisis.

2. Stop all debt payments except the minimum balance due

If prior to COVID-19 you were trying to get out from under your debt by paying more than the minimum balance due, I applaud your efforts and your desire to become debt free!  But right now while your income isn’t stable, you need to let the least amount of money leave your bank account.  Save as much of it as possible!  That means going back to only making your minimum payments.  I know it’s frustrating to lose momentum on your debt payoff, but remember this is only temporary.

3. Look for ways to make extra income

Look into working for Doordash, Uber, or Instacart.  Find things in your home that you can sell.  Rent out a room in your house.  There are many ways to make extra income, and every little bit helps during times like these.  Right now if you become an email subscriber I will send you a list full of ideas for increasing your income and cutting expenses.  It’s my free gift to you to get you through these difficult times.

4. Don’t take out any loans or go into additional debt!

As tempting as it might be to take out a loan to ease your present money worries, please avoid it at all costs!  It will only add to your stress, and will be a detriment in the long run.  It’s one thing to put debt payoff on pause, but it’s quite another to slide backwards.  Keep moving forward!

5. Don’t cash out retirement funds

The instability of the stock market during these times has caused a lot of people to cash out their retirement funds.  The reasoning is “I’ve lost so much money already, I need to pull it out now while there is still some left!”  Unless you plan to retire in the next few years this is the wrong way to think about it.  The stock market will bounce back, and when it does you will make your money back and then some.  Sure, it may take years.  But those years will pass anyway, and if you’ve cashed out your retirement funds there is no possible way that money can ever grow back to what it once was.  Leave it alone and trust that stock market history will repeat itself and bounce back as it always does.

By implementing these 5 tips you will be on your way to a more peaceful financial situation even during this time of crisis.  You are not alone and you will get through this.  Please feel free to leave a comment or send me an email if there is anything I can do to help guide you through this uncertain time.  Your income may not be stable now, but things will start looking up sooner than you think!