Budgeting Income

A Strategy Plan When Your Income Is Reduced


Losing a job or any type of income can be stressful.

A budgeting income strategy plan can help you gain control of the situation and can be your best defense against a debt problem. Hopefully this plan will result in as little credit repair as possible.


First bit of budgeting income strategy is, a discussion with any family members to assure they understand the situation and will have to make some sacrifices.This may also get some creative juices flowing as to some solutions to the problem.



Make a full assessment of the situation.

  • List guaranteed dependable regular income.
  • Then list assets that can be liquidated or sold.
  • Occasional sources of income.

Another important thing to consider in the budgeting income strategy is whether that income is permanently reduced or whether there is a foreseeable end to the reduction.

Conversely list expenses in order of their priority.

Essential expenses or high priority debt that would affect you or your family critically if they were not paid. Rent or mortgage, food, utilities, medical insurance and transportation costs.

Next to consider in the budgeting income strategy plan are the types of loans you may have. Are they secured or unsecured. Secured meaning a piece of property secures that loan and when payment is not met that property is in danger of being repossessed. Is there property you can do without? Keep in mind there may be a difference in market value to loan value and you can still be held responsible for a deficiency.




Lastly is the unsecured debt, usually credit card debt and medical or dental debt. These are usually considered low priority debt. These can be discharged or heavily reduced if the situation turns to bankruptcy. In light of bankruptcy and unsecured debt you have the ability to negotiate much more comfortable terms for yourself.


Before making any final budgeting income plans about who to pay and how much to pay, a phone call to every creditor is a must.


When you are in a reduced pay situation letting your creditors know that you wish to avoid bankruptcy is very helpful in getting them to offer you attractive deals to avoid that situation.


If you do resort to bankruptcy low priority debt can be wiped off the slate completely and they lose.The credit card companies would also rather not use expensive credit collection companies so this can all work to your advantage.



Resources available with a reduced income




You, in a reduced income situation, are most likely eligible for assistance with utilities, food, and other resources. Search for fuel assistance programs online. Another name associated with assistance is Good Neighbor energy fund. Your local chapter of consumer aid/action counsel may also be a good source of information for resources.


Car share programs are popping up everywhere. This idea has been started with the idea of going green and reducing our carbon footprint but it sure helps the wallet too.


In car sharing those with a vehicle that is not being used one or several days a week, the vehicle is lent out specific times and days for sharing the use.

The parties involved must set out a plan for sharing the costs. I've seen this with neighbors before the term even came up.


In your budgeting income plan you may be able to save even more as your reduced income may make you eligible for subsidized health insurance or even free care if it is available in your area.


You can ask the billing agent at your doctor's office or if you go to a large health facility many times there is an office that takes care of all financial matters.They will usually be well aware of what is offered in your state.


Almost every company has a goodwill plan but you must ask. Cable bills can be cut in half. This was done for me by my cable company when I called and suggested that I needed to turn off the cable for a few months to catch up. I got a 6 month rate reduction.


If you do have assets such as cash value on a life insurance policy you may want to consider debt settlement.


Even though I call this the scary debt solution option, when you are taking an asset such as cash value of life insurance you want it to do the most possible action for the money loss. You do not want to just be getting by for now with regular credit card payments.


Especially if it is unforeseen when your income will return to normal levels. You want to remove as much debt as possible.


Some suggest consolidation loans but many times you may just be extending a problem instead of solving it with these. They may be a good option if the income reduction has a time limit. Shopping around for rates and best deals offered will let you know if this is a good option for your circumstances.


All in all income loss can be difficult, but with research and a budgeting income plan in place hopefully you can alleviate a disaster and make it through to when your income is restored.


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