How to prepare your finances if you lose your job or income drops

If your income drops suddenly, first calculate how many months you can hold out. Use the savings calculator to estimate your runway with the cash you have and any benefit or severance coming in.

Then freeze all non-essential spending for a few weeks: subscriptions, impulse buys, trips and extras. That pause gives you room to think with less pressure.

If you are eligible for benefits or assistance, file as soon as possible. Do not wait until everything is perfect: every day you delay is cash not coming in.

Essentials are housing, food, utilities, basic transport and health. After that come the payments that keep you operational, like internet or your phone if you need them for job searching.

If you have a mortgage, personal loan or card repayment, speak to the lender before missing payments. The loan calculator helps you understand what instalment you can sustain and how much you may need to stretch the term.

The goal is not to pay everything at once, but to stop the snowball effect. If a debt is expensive, try refinancing; if not, negotiate a temporary grace period or lower payment.

Once things stabilize, build a base budget around the new income level. The key is not to spend like before, but to design a structure that can survive another setback.

If you can generate extra income through side jobs, training or freelance work, automatically route part of it back into the cushion. The emergency fund should start growing again as soon as possible.

When stability returns, restart investing gradually. You do not need to contribute the same amount right away; first rebuild liquidity, then speed up.