No one is immune to a drop in income. It can be due to a change of professional activity (dismissal, unemployment, retirement), family or marital or to a life accident. Several solutions exist to deal with a drop in income and thus avoid ending up in a situation of over-indebtedness.
Even if it is not always easy, saving allows you to face a low income. It is recommended to save between 1% to 3% of your salary to build up precautionary savings. These funds will help cover expenses during the difficult times. The establishment of automatic savings ensures the constitution of capital. This is an amount that is withdrawn each month from the bank account. The Popular Retirement Savings Plan allows you to save throughout your professional career in order to benefit from a pension for life from retirement age. Other financial investments are possible: life insurance and the capitalization contract which help to gradually build up capital.
Obtain a repurchase of credits
The repurchase of credits has several advantages and can make it possible to cope with a drop in income. Negotiating a repurchase of credits is interesting for people who hold more than two credits because this operation consists in grouping the credits to have only one debt, a single rate and lower monthly payments. If you do not know how to negotiate a loan buyback, sites like partners-finances.fr give you all the keys to get there.
Consolidating your credits makes it possible to restore flexibility to a sometimes tight budget. This even allows you to quickly obtain additional cash in the event of a big blow. The repurchase of credits is not reserved for those who have a professional future ahead of them, it is also open to pre-retirees and retirees.
When purchasing credits, supporting documents are required to constitute the file. It is recommended that you provide them quickly so that the procedure can be done as quickly as possible. Calling on a brokerage organization makes the process easier. They are experts in the field who benefit from banking partnerships and therefore advantageous rates. In addition, a broker will give advice throughout the constitution of the file. Be careful, when buying credits, honesty comes first. It is useless to lie about your income to have a better chance that your file passes.
Read also: The repurchase of credit, a solution to reduce your monthly payments?
Reduce monthly loan payments
Some home loans are flexible. This means that the amount of monthly payments can be reduced or even postponed for a few months. It is better to contact the credit agency as soon as possible in the event of a sudden drop in income rather than wait for the financial situation to deteriorate. The period of decline can be from 2, 3 to 6 months depending on the mortgage. Sometimes an option to suspend or postpone payment is possible, but it usually has to be paid. A solution to be considered only in case of real need therefore.
Scrupulously study your budget
A drop in income requires careful scrutiny of your budget. Now is the perfect time to use price comparators and change energy supplier, insurer or mobile operator. Sometimes several tens of euros can be saved each month. This glance at the budget is an opportunity to cancel unnecessary subscriptions (the gym you never go to, a box received each month …). This tip helps to be aware of all the real expenses that occur each month and reduce or even eliminate those that can be.
Request accessible assistance
A drop in income can give access to financial aid and allowances. Do not hesitate to ask them. Some give access to preferential rates on water or electricity. A change of situation and therefore a drop in income can give access to benefits or even lead to an increase in the amount already received. This concerns in particular the aid granted for housing. Finally, other aid is granted more specifically for families.
To cope with a drop in income that is likely to be long-term, a solution makes it possible to act quickly: ask the tax authorities for a reduction in the rate of the levy. Any drop in income opens up access to this possibility. This request is made on the imposts.gouv.fr website in the section “Manage my direct debit at source”. It must be completed before the 22nd of the current month to be effective the following month. This small step takes very little time but helps to avoid advancing an unpaid tax due to the drop in income.
Negotiate with creditors
When the drop in income leads to a really complicated financial situation, it is preferable to inform your creditors (the lessor, the tax office, the electricity supplier, etc.) fairly quickly. A simple negotiation sometimes makes it possible to obtain payment terms.
Read also: Career change: how to optimize your finances?