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“Watching your pennies” is a euphemism for frugality that aptly sums up the frugal mindset. Frugality is not about cheapness as much as it is being aware of what you’re spending and getting the most for every cent you spend. Unless you are independently wealthy, frugality is essential; by applying frugal rules to everyday life, you can protect yourself from unforeseen and unintended negative financial consequences, such as losing your job. Imagine how bad it would be for someone accustomed to receiving a regular income to lose his or her job as the result of an injury or illness caused by another party. It sounds like a nightmare for anyone who wants to hold on to their cash flow and career.
Preparing for Work Leave with Frugality
There’s a possibility that you may have to leave work because a relative has become ill through no fault of their own. One such scenario in the U.S. saw a couple left to care for their son after he received a faulty vaccine. After taking action against the hospital at fault, they received compensation.
In any case like that, one of your main concerns could be about how you’re going to pay the bills. You may be able to receive statutory pay to meet your costs for the first few weeks. But, should you find yourself unable to work after that what recourse would you have to continue to earn or bring in some form of income? Practicing frugality beforehand should help a bit as you become accustomed to living within your means, living by a budget and spending only what you must on groceries, utilities, entertainment and other bills. After an accident, incident or circumstance disables you from regular work, trying to spend less on food and energy by buying cheaper products could help, but that might not be enough.
What to do With an Accident at Work
In the event of an accident at work, there are rules governing what you may be entitled to. One of the rules concerns making a claim for compensation, which is possible if you prove your finances have been depleted because someone else caused you to leave your job.
I know quite a few people who have been felt that they have no choice but to go down this route. One of my family members recently contacted first4lawyers, a UK medical solicitor company who offered advice on what to do about their situation. They helped them to make a claim for compensation.
A successful claim could result in compensation equivalent to the money lost and bills incurred through illness or injury sustained by yourself or a close relative. I know what to do if I ever find myself struggling after being laid off through injury caused by someone else now. While you’re working hard to make frugality a constant part of your life, if an unforeseen circumstance takes you out of work and a third party may be responsible for that circumstance, getting help filing a solicitation may be something worth exploring. Just don’t forget to keep living frugally should you win a settlement.
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If you have accident, sickness and unemployment insurance, it’s important to be sure sure on exactly how much you would be entitled to in the event of an accident. Many policies only cover up to 50% of earnings so it’s easy to think you’re well protected when actually you’re not.
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That’s a great point Adam! That’s part of the reason why I am a huge proponent of having a very sizable cash cushion in order to be prepared if the worst were to happen.
In an emergency, there’s usually room in one’s budget to cut back. This helps an emergency fund stretch farther when things go wrong. Which inevitably, they do. Unemployment insurance really only covers a portion of your previous earnings, so frugality can help you get the rest of the way.
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Those are some great points Daisy! There really can be a number of areas you can cut from in a budget in order to make up for a shortfall.
I’d like to address the workers who get laid off pretty regular at work. They know this is going to happen, because it happens every year, sometimes several times a year. Do most prepare for it? No.
As a landlord, I have several tenants, who think nothing of saying “I got laid off, I will get you the rent when I can”. Well, I have mortgages to pay, and my bank doesn’t care if I am having problems collecting rent. In the past we tried to be patient with tenants, and all it got us was tenants who started to take advantage of it. Now, we issue evictions as soon as we are able to. I’d rather have the place empty, than someone living there for free.
If people can’t trust having money around for emergencies, prepay bills.Even if you don’t want to prepay your rent, make double or triple payments on cable, phone, car payments, utilities etc . This way you can use your last paycheque to pay your rent while you wait for your EI claim to start.
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When I first read the Title of this post the first thing that came to mind was,”Yes, absolutely, Frugality should help you financially in a challenging time”. But, no matter how well prepared you are, should you be laid off or be disabled, there will definitely have to be some lifestyle changes to accomodate the lower income stream.
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Great point Jose! Being prepared before it happens can be a great thing to do as well if you’re able to develop multiple income streams.
We should always be prepared for anything to happen in our lives hence why we bought our house with only one income instead of the half million + they wanted to give us. We should be putting something aside in case something should happen. Don’t always rely on the compensation system because you could be sitting in it for months if not years fighting and for some lose. Many people have lost everything thinking that comp will be their money paying ticket in the event of injury at work, not always the case. Unless someone has so much money they don’t know what to do with it, spending less than you earn and saving for the future is imperative IMO.
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Great points Mr. CBB! If you’re not spending less than you’re making you just asking for issues, regardless of the situation you’re in.
Something else people should do, is stocking up their pantry. It is recommended people should have a month or so…but really, in this economy, I’d think 12 months is more realistic.
Start with $10 a week to add to your “stockpile” . This doesn’t mean stocking up on candy/junk food or deciding to have a party next month because we have lots of food.
Should a real emergency come, your last paycheque will be needed elsewhere and at least you can eat.
If you are living one paycheque away from disaster, severely cut back, get off your butt, and do something about it. It could be simple things like collecting useful stuff at spring/fall cleanups..cleaning them up and selling them at a garage sale.