Dealing with Reduced Work Hours and an Already Tight Budget

by Gary Foreman

Dealing with Reduced Work Hours photo

What can you do when your already tight budget gets an income reduction? We explore some steps you can take to get by until things get better.

Dear Dollar Stretcher,
I’m in real trouble. I’ve been living on the edge for months. I’m just barely able to pay my bills. I don’t spend anything on myself.

Last week, my boss cut my hours. I’m really stressed out. What can I do when I’ve already cut my budget to the core?
Brooke

You’re not alone. Many have had their hours cut. Others have been laid off. But ‘misery loves company’ is not a solution to your problem.

And a reduction in hours can be a serious problem, especially for people like you who are already living on the edge financially. Let’s see if we can’t find some frugal answers for you.

Determine your new deficit

The first and probably most important step is to have good information on how much you’re currently spending and what your new income will be. You need to know how much you’re short.

Once you know how big a gap you’re trying to close, you can begin the hunt for dollars. We’ll look at ideas from the simplest to the more severe.

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Take a hard look at your expenses

Start by taking another look at your current expenses. You’ve already cut the easy stuff. This time you’ll have to go deeper. It’s time to eliminate any expense that doesn’t feed you, heal you, put a roof over your head, or make it possible to earn an income.

Get creative! Try to look at each expense with fresh eyes. Don’t skip anything just because you don’t think you can live without it. Make sure that’s really true. You’d be surprised what you can live without in a crisis.

Almost everyone can cut the grocery budget further

Spend some time searching for solutions that are new to you. For example, have you ever visited a “salvage” grocery store? They often deal in overstock items or products in dented cans.

Or try visiting a bakery outlet. Stop there before you hit your local grocery store.

Groceries are an excellent place to look for savings. Most families spend between 10 and 20 percent of their take-home pay on food. Plus, you make purchasing decisions almost daily. That means that your food budget offers many opportunities to save.

Plan on eating and preparing all your meals at home. On average, people spend about 40 percent of their food budget on food prepared outside their home.

You can have a steak dinner at home for the price of a big M meal. Or you could make your own burger for a fraction of the cost. The same thing is true of any restaurant or takeout meal.

Cook “from scratch” as much as possible. Basic food items aren’t that expensive, but if you’re buying food that you just pop into the oven or microwave, you’ll pay top dollar. Eliminate single serving and convenience items. (See How Heirloom Cooking Saves Money.)

Collect some frugal recipes. Even with grocery prices that seem to go up each week, you can still make some meals that are nutritious and frugal. Often the trick is limiting the amount of meat and sticking to staples.

Emphasize basic food stuffs. Things like rice, potatoes and beans. Most are filling, nutritious and low cost. (See Going Beyond Cheap Recipes to Reduce the Food Budget.)

Cooking isn’t as hard or time consuming as you might think. There are many resources online that can teach you. Doing your own cooking will save you money every time you prepare a meal.

Learn to use “in season” fruits and veggies. We’ve grown accustomed to having the produce we like available year round, but when it’s out of season locally, it must be shipped in, and the prices reflect that. Let your diet change seasonally. Take advantage of the food items that are grown in abundance locally. (See 14 Ways to Buy Produce for Less.)

Cut out all the non-essentials

Look for ways to avoid purchases of all types, especially things that you’ll only use a few times a year. It’s easy to fill your garage with things like carpet scrubbers and wood chippers that you can borrow from a neighbor. Offer to pay them a few dollars for the “rental” and you’ll be doing them a favor, too.

Some other steps to take

Before you consider deeper cuts, you’ll want to see if either government assistance or a part-time job could help.

A reduction in your hours might make you eligible for a partial unemployment benefit. Check with your unemployment office. Also, find out about food assistance programs and what local food banks are available.

Don’t be afraid to take on part-time work. It might take a bit of schedule juggling, but it’s not like you’re not used to working more hours, and having an extra source of income could be real helpful if the cutbacks aren’t temporary.

Finally, you might find that the only thing that can save you is a serious lifestyle adjustment. You may find that you need to move to cheaper housing, take in a roommate, or sell your car. Those aren’t easy choices, but they can provide serious monthly savings.

Hopefully, the reduction in hours will be temporary and you’ll find making up the shortfall easy. But, don’t go in with that assumption. We’re in unusual territory. No one can see the future clearly and you’d be wise to be prepared for the longer haul.

Reviewed December 2020

About the Author

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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