Step 1: Assess your situation
Start by getting a clear picture of your current reality. This will help you better understand what you’re working with so your decisions work for you instead of against you.
Write down:
- How much income you’ve lost and whether it’s temporary or ongoing
- How much money you have available right now (checking, savings, emergency fund)
- Your essential monthly expenses (housing, food, insurance, etc.)
- Any upcoming bills or payments due soon
This snapshot helps you see how long current funds can last and where you might need to make adjustments.
Step 2: Prioritize your spending
When income drops, it’s time to focus on what truly matters. Ask yourself: what do I absolutely need to keep my household running?
Essentials take priority and usually include:
- Housing (rent or mortgage)
- Utilities (electricity, water, heat)
- Food and groceries
- Transportation (if needed for work or medical care)
- Insurance and medications
Then look at what you can temporarily pause, such as:
- Subscription services
- Eating out or entertainment
- Non-essential purchases or upgrades
Let go of the “nice to haves” so you can protect the “need to haves.” When your income recovers, add back the extras you want to keep.
Step 3: Tap into your emergency savings fund
If you’ve been building an emergency fund, now is the time to use it. Withdraw just enough to cover your essentials. Transfer funds from your savings to your checking account so you can pay for what’s urgent without delay. Plan to rebuild it gradually once your income has improved.
If your emergency fund is limited or nonexistent, you still have options. Focus on what you can do right now, not what you wish you’d done differently.
Step 4: Communicate with your creditors and service providers
Companies are often willing to work with you during financial hardship. Many creditors, utility companies, and lenders offer programs to help customers through challenging financial times. You might be eligible for payment deferrals or reduced payment plans. Expect to submit documentation showing your loss of income, such as proof of unemployment or reduced wages, in order to qualify.
Reach out and ask about:
- Payment extensions or deferrals
- Reduced minimum payments
- Waived late fees or penalties
- Hardship programs specifically designed for income loss
Contact them before you miss a payment. Proactive communication shows you’re committed to meeting your obligations and often opens doors to solutions you didn’t know existed.
Step 5: Explore short-term assistance
If you need additional support, look into resources available in your community or through your financial institution. Many organizations offer assistance programs during times of income disruption.
This might include:
- Unemployment benefits (if eligible)
- Community assistance programs for food, utilities, or housing
If reaching out for help feels uncomfortable, you’re not alone. That’s a common feeling. But accepting support during a tough time isn’t a weakness. It’s smart, and it’s exactly why these programs exist.
Step 6: Avoid high-interest borrowing
If you’re considering borrowing to bridge the gap, ask yourself a few questions to make sure you’re not trading one issue for a bigger one down the road.
Before submitting a loan application, ask yourself:
- Do I have other options I haven’t checked out yet?
- Can I afford to repay this once my income resumes?
- What will this cost me in interest and fees?
If you do need to borrow, look for lower-interest options like personal loans from your credit union or relief programs designed specifically for income loss situations.
You can get through this
Losing income is stressful, but it doesn’t have to throw your financial future completely off track. With a practical plan and open communication, you can handle this challenge and safeguard what you’ve worked so hard to achieve. Let us help.
If you’re facing an unexpected loss of income, HawaiiUSA might be able to provide financial relief. Contact us to learn more about how we can support you during this time.
Resources
U.S. Department of Housing and Urban Development (Homeowner counseling)
U.S. Department of Housing and Urban Development (Renters counseling)
Feeding America (Food bank locator)
