A little less than a year ago we made the decision for me to step away from a leadership roll in my company. I had held that position for about 11 years so it wasn’t an easy decision to make for so many reasons, but one of the biggest factors we considered was the income dip that would come along with it. Now that it’s been almost a year, I have a few tips to share about how to survive that time.
1. Use this time to reset
While a dip in income can be stressful it can also be a good time to hit the reset button on a lot of things. If you lost your job, this might be a good time to re-evaluate your priorities before you jump into another one. If your hours got cut, maybe now is a good time to think about what you want to spend your time doing.
Don’t be afraid to take some time to figure out what you really want for your life and for your family.
2. Know your numbers
If you don’t already know your numbers, it’s extra important now that you’re not bringing in as much money to figure that out. Get all your sources of income and expenses out on paper. You may be surprised with what you find. In many cases people find they’re actually not in as bad of a position as they thought. You may also realize that with a few tweaks to your expenses you’ll be fine for an extended period of time.
You won’t know what your situation really looks like until you face your numbers so let’s just go ahead and face those numbers, ok?
3. Get creative with income generating ideas (if needed)
If you’ve done your numbers work and see that you’re ok you might not need this part, but if you’re in the negative now is the time to get creative with bringing in income until you get a new job or your income increases again.
- If you have a partner and you share expenses, can they ask for a raise or look for a promotion within their company?
- What are you already doing that you can monetize? i.e. carpool, babysitting, tutoring, etc.
- What skill do you have that you can offer to others? i.e. virtual assistant, teaching classes on a skill you have, making and selling goods, etc.
- Who do you know that has a business that you could reach out to and offer to help on a project basis until you get back to a more full time situation?
4. Don’t make rushed decisions
It’s natural to want to jump into something but if you can avoid it, try to take your time. You don’t want to add more stress with a quick decision that wasn’t a good fit for you. After you’ve done your reset, weigh all your options before you dive into something new.
* How to prepare for an income dip before it happens
1. Know your numbers
I will repeat this one because it’s important no matter what your season looks like. The best way for you to feel like you’re on track is to know where you’re at. So again I will tell you, let’s go ahead and face those numbers.
2. Don’t spend every dollar you make
I remember being in college and checking my bank account balance to see if I could afford a new outfit. $47 in my account? Perfect this outfit is $44 so I’m good! It sounds obvious but so many of us have no margin for savings, debt payoff, or investments. If you’re fortunate enough to be in a season where all your needs are met AND you have excess, be sure that excess isn’t disappearing without first setting yourself up for success financially.
3. Emergency savings!
Most people I talk to who have a lot of debt didn’t get there by being super irresponsible. Oftentimes it’s that they had a lot of life happen all at once without the safety net of an emergency fund. So let today be the day that you decide to start prioritizing building up an emergency savings account so that when your income dip happens it feels more like a bump in the road than a massive mountain.
If you’re right in the middle of a challenging financial season, I’m sending you all the love and support. It’s not easy but I’m believing you will get through it!
If you experienced a similar income dip, what did you do that helped get you through?