Said It Here

How to survive a massive drop in income

A sudden income drop forces an immediate lifestyle squeeze where fixed costs like mortgages consume most of the remaining cash flow. People in this situation have to radically cut spending, pause long-term savings like retirement contributions, and find clever ways to penny-pinch just to survive months of unemployment or underemployment.

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

  1. 1
    Shopping weekly circulars and letting grocery store sales dictate meal planning
  2. 2
    Tracking spending meticulously using budgeting tools or apps like YNAB
  3. 3
    Focusing cuts on large expenses like housing and transportation rather than minor lifestyle items
  4. 4
    Pausing or temporarily reducing retirement contributions to increase liquid cash flow
  5. 5
    Utilizing free public library resources for entertainment and media

In their words

Unedited, most upvoted first, each linked to the thread it came from.

“I need advice about adjusting to being more frugal and what are the best/sneaky ways to penny pinch.”source ↗

TwoNarrow5980 · r/personalfinance · 2 upvotes

“Yes, I'm wishing I would have held off on a mortgage until after figuring out my career. Unfortunately we are here now and mortgage+utilities will definitely be our biggest expense.”source ↗

TwoNarrow5980 · r/personalfinance · 1 upvotes

“Source: I was laid off last year, had to rapidly tighten finances up while spending most of a year unemployed, and am now making about 35% of what I used to.”source ↗

BakerParticular8705 · r/personalfinance · 1 upvotes

“I'm wondering if we temporarily contribute less to retirement for these two years to have more liquid cash, or if that's a dumb idea.”source ↗

TwoNarrow5980 · r/personalfinance · 1 upvotes

Where this came up

r/personalfinancebudgetingpersonal finance

People with this problem also raised