In an ideal world, we’d all coast through life without having to worry about disruptions to our cash flow. But since we don’t live in an ideal world, a disruption of this sort could land at any moment.
You might be made redundant, or suffer a sudden debilitating injury or bereavement. Whatever the cause, the inability to work can be a serious problem if your finances aren’t sufficiently robust. Let’s examine some of the ways we might prevent this circumstance from arising.
Savings
If you’ve put aside a little bit of money each month, then the total will act as a buffer when that rainy day finally arrives. This doesn’t need to be an enormous amount: saving just a few pounds every day will add up to hundreds or even thousands over the course of a year. So how much should you be saving? It depends how long you want to be able to live without working: calculate your expenditure and establish how much you need to work for half a year.
Debts
Restructuring your debts might make them a great deal more manageable. If you don’t think that you’re going to be able to meet your obligations, then it’s usually easier to front up to your lenders early on. If you have family member who can lend a hand, don’t be too proud to ask for it!
What about Insurance?
Income shock isn’t a new phenomenon, and there exist a raft of insurance products designed to help you to come with it. These include Payment Protection Insurance, which often comes bundled with products and services which assign a debt to you, and will keep your payments coming even if you aren’t working. Then there’s Short-Term Income Protection, Mortgage Payment Protection Insurance, Critical Illness Cover, and others. The type of insurance that you need will depend on your personal circumstances, so make sure you assess your options and see what’s available.
Alternative Income Sources
When you find yourself unable to continue in your job, it can be very demoralising, especially if you have only done one thing for your entire life. But retraining in something else can be extremely rewarding, and give you the impression that you’ve earned a second chance. If you’ve always dreamed of starting a business from home, then look at this setback as an opportunity. Online tutoring, babysitting, dog-training and other disciplines can all be lucrative if you’ve able to put the time in. Clearing out some of your old stuff using eBay and Facebook marketplace can also be worthwhile.
Is anyone to blame?
In some cases, you might be able to claim compensation for your inability to work. If it’s arisen as a result of something like medical negligence, then legal action might help you to recover your losses and absorb the shock to your finances. This will require an experienced, specialist medical negligence solicitor – so make sure you have one.
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