What should I do if my income is about to drop?

The single most important factor is timing. Almost every option — payment holidays, reduced arrangements, support schemes — is easier to access before payments are missed than after.

What you'll need

• A list of all outgoings
• Statements (optional)

Step by step

1. Work out your genuine minimum monthly cost.Housing, utilities, food, transport, insurance, minimum debt payments. This is the number that tells you how long you have and what has to change.
2. Work out how long your resources last at that level.Savings plus reduced income against the minimum cost. Having a specific number of months is far less frightening than not knowing.
3. Check what you are entitled to.Benefits, tax credits, hardship schemes, council support. Entitlement is often wider than people assume and substantial amounts go unclaimed.
4. Contact creditors and providers early.Before missing anything. Payment holidays, reduced arrangements and hardship schemes are far more available to someone who makes contact in advance.
5. Cut the non-essential spending immediately.Subscriptions, memberships, discretionary spending. Early cuts extend your runway considerably; late cuts do much less.
6. Prioritise correctly if things get tight.Housing, utilities, council tax or rates, and food first, ahead of unsecured debts. The consequences of missing those are far more serious.
7. Get free debt advice if you need it.Free regulated services exist in most countries and are considerably better than commercial debt management. Contact them early rather than at crisis point.
8. Keep looking after the basics.Food, sleep, and staying in touch with people. Financial stress is genuinely hard and isolation makes every decision worse.

Tips

• Cancelling subscriptions and reviewing every direct debit is usually the fastest available saving and can be done in an afternoon.
• Do not use high-cost credit to bridge a gap without advice. It converts a temporary problem into a longer-term one.
• Check whether any insurance or employment terms cover loss of income. People frequently have cover they have forgotten about.

Common mistakes

• Waiting until payments are missed — Almost every support option is easier to access before arrears build up. Early contact is the single most useful thing you can do.
• Assuming you are not entitled to support — Eligibility is often wider than people expect and substantial help goes unclaimed. Checking takes an hour.
• Paying unsecured debts ahead of rent or utilities — The consequences of losing housing or supply are far more serious than a mark for a missed credit card payment.

Questions people ask