Acknowledge, Adjust To Bounce Back After Your Income Drops

Losing income is never easy, but it's become increasingly common over the last year and a half. According to the Pew Research Center, 44% of adults say their household has experienced either job loss (including temporarily) or a pay cut since the beginning of the pandemic.

Even if the reduction in income is temporary, this creates an incredible strain – as people scramble to cover basic expenses like food and housing as well as monthly bills and everyday expenses. Having a sense of your budget and avoiding procrastination is the key to doing well post-pay cut, says certified financial planner Manisha Thakor, founder of a financial educational consultancy. She says your odds of surviving and perhaps thriving, go up exponentially “if you know your expenses beforehand, immediately acknowledge something bad has happened, adjust to them, and open your mind to the notion that it’s really likely that by downsizing, you could actually end up having a richer life.’’

ACKNOWLEDGE EMOTIONS

“It’s okay to admit that it’s a crappy situation and you are going through it. I think a lot of people don’t give themselves that grace,’’ says Athena Valentine Lent, founder of a financial adviser website.