Living with a sudden drop in income
- Make a budget and money management plan
- Set your priorities
- Boost your income
- Check your insurances
- Cut back your costs and spending
- Get debts under control
- Contact MABS for help
Losing a job or having your income cut canbe stressful. You might feel panicked butdon’t worry. The key tomanagingyour money is to take steps to adjust to your new incomeas soon as possible.
Here are some simple steps to keep on top of things.
Make a budget and money management plan
Take the time tomake abudget andmoney management planthat looks at the money you have coming in and going out.Now that your income has reduced, the quicker you adjust what is possible to adjust, the less debt you will have to deal with later. You can use our My Budget tool to help you look at income and outgoings, or if you have debts, use our My Full Financial Picture toolto include everyone you owe money to.
Set your priorities
You’ll need to make sure you can pay the most importantdebts first.This can be hard, but agood starting point is to listyour bills and anydebtsyou haveinto:
- Priority debts (for example rent, mortgage, and electricity)
- Secondary debts (credit card, personal unsecured loans).
Read more on how to prioritise your debtsand deal with any urgent bills first.For example, if someone is threatening to repossess your home, disconnect your electricity or repossess your car, you will have to act quickly and reach a repayment arrangement.
Boost your income
We sometimes get into debt because we are not receiving all the money we are entitled to. Here are some areas that might increase your income.
Social welfare
Check that you are getting all your entitlements. You can get information on social welfare fromCitizens Informationor from theDepartment of Social Protection.
Youcan apply for asupplementary welfare payment if you’re unable to cover your living costs and meet certain conditions. Contact theDepartment of Social Protection’s representativeatyour local office.(Formerlyknown as the Community Welfare Officer)
Back to work schemes can help you return to work. Find information on the different schemesfromCitizens Information.
Tax
You may be eligible for tax credits or a rebate.Contact Revenue to check your entitlements.
You can earn tax-free income byrenting a room in your home. Find more information on theRevenue website, but also check if there are any consequences if you are claiming a welfare payment.
Employment
There are laws on wages, dismissal, equality and redundancy which could mean you’re owed money by your employer or previous employer.Contact Citizens Informationto check your entitlements.
Some large employers have schemes to help employees (or past employees) who are having financial difficulty.There may also be local community or voluntary groups who can help you during this time.
Check your insurances
Ask your lender whether your mortgage, loan or credit card is covered by insurance. You may get an insurancepay-outif you’ve been paying:
- Payment protection insurance
- Mortgagepayment protection insurance
- Short-term income protection insurance
Cut back your costs and spending
With your budget in front of you,do the following:
- Look at billsthat could be reduced such as electricity.Visit theSustainable Energy Authority of Irelandfor advice on how tolower your bill.
- Use aprice comparison websiteto find a better deal on your household bills.
- Look at spending on entertainment. Even if you decide to cut back here, try and leave room for a social life for you and your family.
- See if you can lower your spending on groceries, housekeeping and clothing (without cutting back too severely).
- Decide how much you need tosavefor dealing with unexpected costs,for example,repairs on your homeand to put by for irregular costs like back to school, Christmas or a family event.
Get debts under control
Read our information on how to tackle debts.
Contact MABS for help
If you’re struggling tomanage your money or to make ends meet, or you feel like borrowing more is the only solution, help is available, contact MABS.
Find outmore:
Visit CCPC’sMoney Hubfor comprehensive information about personal financetopics.
