A sudden drop in income when the bills keep coming can result in panic and stress, but proactively figuring out what you have and developing a plan can help buffer those feelings.
Income drop? Take stock and set priorities
Developing a spending plan can help reduce stress, maintain control of your financial position
April 22, 2020
MANHATTAN, Kan. – The economic fallout from closed businesses and lost jobs linked to the new coronavirus hit with almost no warning, abruptly slashing the income of millions of Americans. The situation is heightening stress as individuals and families figure out how to pay rent, utility bills and more.
“An abrupt loss of income, whatever the reason, can be traumatic,” said Kansas State University associate professor Elizabeth Kiss. “When it happens, a common instinct is to panic. Although natural, avoid the temptation to tailspin as much as possible.”
It may feel like you’re not in control right now, but there are things you can control, said Kiss, a family resource specialist with K-State Research and Extension. She provided suggestions in Don’t Panic – Take Control, one of a series of resources available free online under the title, When Your Income Drops.
In it, Kiss encourages people to:
- Don’t panic, take control. Don’t blame yourself for the current situation. Instead use that energy to deal with your situation.
- Control stress. Being proactive about developing a plan to manage your finances can reduce stress.
- Take stock of family resources. Know what you own and what you owe. Find out about community or government resources available to help people in tough situations like yours.
- Set priorities for spending. Now’s the time to talk with family members about how each uses money. Design a family spending plan.
- Pay creditors. It may mean calling them to make arrangements that you both can live with.
- Keep a roof overhead and meet insurance needs. Knowing that the basics like food and diapers, the mortgage or rent, the utilities and essential insurance are paid for can go a long way toward easing stress.
- Sharpen your economic survival skills. Consider how you can substitute, conserve, cooperate or cut back on your spending.
When Your Income Drops fact sheets are available online on the K-State Research and Extension website.