Bouncing back

How to recover when your income takes a hit

According to the Pew Research Center, 44% of U.S. adults say their household has experienced either job loss (including temporarily) or a pay cut since the beginning of the pandemic, with Hispanic and Asian adults most likely to say so.

Your odds of surviving and perhaps thriving go up exponentially “if you know your expenses beforehand, immediately acknowledge something bad has happened and you need to adjust them — and open your mind to the notion that it’s really likely that by downsizing, you could actually end up having a richer life,” says certified financial planner Manisha Thakor, founder of MoneyZen, a financial educational consultancy in Portland, Oregon

1 Acknowledge the emotions There can be grief involved in losing income as you mourn your previous lifestyle, says Daisy Luther , founder of The Frugalite website. She suggests giving yourself a set amount of time to feel sad and then start focusing on how you are going to move on.

2 Zero in on food Food is a major spending category for a lot of people, and it’s a prime target for cuts, says Valerie Rind , author of “Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin,” who experienced a major income drop when she changed careers about 16 years ago.

Recently, she has gotten inspiration for meals from TikTok chefs, who break down recipes in short video segments. “It makes things easy and simple,” she says, adding that her favorite chef is @thatdudecancook.

3 Relish the challenge of being frugal Luther suggests treating frugality like a game. When it comes to food, home decor or an accessory, she suggests asking yourself if you can make it for less than the cost of purchasing it.

“It really can be a lot of fun,” she says. She enjoys growing tomatoes and lettuce to make her own salads, which she estimates saves at least $10 a week.

4 Save up for next time If you’ve had to deplete your emergency fund or don’t have one, consider deepening your cuts to allow savings that will cushion you in the next financial crisis. Thakor suggests a $2,000 emergency fund goal and then continuing to build — but even $500 can protect you from financial shocks.

This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org.