Coping With an Income Shortage

Most states don’t offer unemployment benefits for self-employed workers, so if something happens and you’re out of work, don’t expect to get help from your local unemployment office. Instead, it’s up to you to pull some strings to get through the rough patch.

Predict the shortage as soon as possible.

If you know in advance you’re going have a drop in income, you can prepare. For example, you may cut back on some expenses this month or pick up some extra work. I’m predicting a drop in one of my income sources for the month of June. Good thing I have five weeks to prepare for it.

Move money from your “holding” account.

It’s pretty normal for freelance writing income to fluctuate from one month to the next. One of the budgeting techniques I’ve mentioned is to sweep income from higher-earning months into a savings account to use during the months you earn less. If you’ve been doing this, you may have enough money in your holding account to make up for the lost income. If you don’t have an account like this, maybe you have a savings account or emergency fund you can spend from. Be sure to put the money back into your emergency fund.

Get some new work.

The beauty of freelancing is that you don't have to go pick up a part-time job every time you’re short on cash. Instead, you can look through freelance writing job listings, ask for referrals, contact old clients for new work, or reach out to clients you’ve had to turn down because you were booked up. Chris does a fantastic job giving marketing tips that keep your name in front of clients, even when you’re not having cash flow problems.

Put more pressure on late-paying clients.

Go back through all your sent invoices to verify they’ve been paid. Follow up on outstanding invoices. Sometimes clients just need a gentle reminder to pay up.

Tighten up your budget.

If your income only falls short by a few hundred dollars, you may be able to eliminate some unnecessary expenses for that month. Go on a strict budget for that month, only spending what’s absolutely necessary. For example, you might cut off your cable television or a kid’s cell phone or cut back on the grocery bill, eat all leftovers, and use up some of the food from the back of the cabinets (if it hasn’t expired.)


Avoid taking out a payday loan or cash advance to make ends meet. These loans are known for trapping consumers and charging triple digit interest rates. According to the Center for Responsible Lending, the average payday loan customer pays almost $800 in fees on a $325 loan! These loans are expensive and hard to get out of.

Even using your credit card to float you through the month is risky because you have to pay that balance back. It may be cheaper than a payday loan, but can lead to just as much trouble if your income never recovers or if it gets worse before it gets better.

When you’re having trouble making ends meet, try to use cash not a loan to pay a bill. However, if you just can’t come up with the cash, borrow from a friend or relative who’s less likely to charge a high interest rate or exorbitant fees.

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LaToya Irby is a full-time freelance writer and a graduate of the University of Alabama. She primarily writes about personal finance, freelancing, and other self-employment topics.

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