Here are six essential ways to manage money wisely when there is no income coming in. Tough times don't last, but tough people -- and smart financial strategies -- do, says rediffGURU Ramalingam Kalirajan.
Life doesn't always follow a predictable path. Sometimes, unexpected challenges like a job loss, health issues or sudden financial setbacks can interrupt our regular income.
During such times, managing the money we have becomes even more critical.
By following a few smart strategies, it's possible not just to survive tough periods but to set the foundation for a better future.
Let's look at six essential ways in which one can manage money wisely when income is no longer coming in.
1. Practise strict frugality
When income halts, reducing expenses isn't just advisable; it's absolutely vital.
Luxuries like shopping at malls, movie outings and dining at restaurants should be paused immediately. Every rupee saved becomes your financial oxygen.
Imagine being underwater. Your oxygen tank is limited. Wouldn't you use it wisely?
In financial terms, money becomes your oxygen during tough times.
Understand the difference between needs and wants.
For instance, if attending a family event is necessary, prefer public transport over renting a car. It may cost just a few hundred rupees instead of several thousand.
Sacrificing temporary comforts helps you protect your essentials for longer.
Always ask yourself before spending: 'Is this a need or just a want?'
2. Choose cost-free entertainment options
Entertainment is necessary for mental health but it doesn't have to cost money.
Instead of going to the cinema, watch movies at home.
Instead of visiting expensive malls, spend time at local parks. You can even combine leisure and health by turning walks into light workouts.
Finding free or low-cost ways to unwind ensures you stay emotionally strong without draining your limited resources.
After all, happiness doesn't always come with a price tag, does it?
3. Avoid taking new loans
When cash runs low, the temptation to borrow can feel overwhelming. But caution is crucial here.
Unless it's an unavoidable medical emergency, avoid taking new loans during periods when you don't have a stable income.
If you already have EMIs -- for example, a home loan -- see if you can use your emergency fund to continue payments.
If that's not possible, proactively reach out to your lender and request a temporary moratorium for about three months.
Always document your communication through email or official letters.
At the same time, if you have high-interest debts like credit card balances (which charge 36-45 per cent annually) or personal loans (with 16-24 per cent interest), prioritise paying them off using any available savings or investments.
Otherwise, penalties and compounding interest can drag you deeper into a debt trap.
Wouldn't you rather fight today's problem than create a bigger one for tomorrow?
4. Utilise your existing assets wisely
In difficult times, your assets can become your greatest allies but only if you use them smartly.
First, list out all your assets -- gold jewellery, fixed deposits, mutual funds, stocks, land, real estate...
Now, evaluate which are growing in value and which can generate immediate income.
For instance:
Gold jewellery: Instead of paying 40 per cent annualised interest on a credit card, you could pledge gold at just 9 per cent interest and clear the card dues.
Endowment life insurance policies: Some policies allow low-interest loans (9-10 per cent). You could use them instead of taking costly loans elsewhere.
Real estate: If you own a vacant plot or house, consider renting it out temporarily. Even a small rental income can help you cover basic expenses.
Remember, the goal is to make your assets work for you, not just sit idle while debts pile up.
5. Take up part-time work
Losing your full-time job can be emotionally draining; sitting idle only worsens the situation.
Look for part-time opportunities to keep the income flowing, no matter how small it seems.
Part-time work doesn't just bring in money; it also boosts your morale and keeps depression at bay.
Discuss the situation openly with family members. Their ideas and support could surprise you -- they might even offer to contribute by taking part-time roles themselves.
Wouldn't tackling challenges together make the burden lighter for everyone?
6. Upgrade your skills
Periods of unemployment are painful but they can also be powerful opportunities.
Instead of worrying, use this time to upgrade your professional skills.
You could:
- Take up industry-relevant courses (online or offline)
- Read career-boosting books
- Watch educational videos to learn new techniques
The goal is to become more employable and valuable when opportunities arise.
Think about it -- when the job market opens again, would you rather compete with your old skills or shine with new ones?
By investing time in self-growth, you prepare yourself not just for survival but for a thriving comeback.
A final must-do: Continue paying insurance premiums
No matter how tight money gets, never skip life or health insurance premium payments.
Many people, under financial pressure, stop paying premiums to save money temporarily. But this is a serious mistake.
If health problems arise during this lapse, you may have to pay full medical costs out of pocket.
Worse, if a life is lost, the family could be left financially devastated without insurance protection.
A small premium today can protect your loved ones from huge risks tomorrow. Isn't that peace of mind worth every rupee?
Ramalingam Kalirajan, an MBA in finance, is a certified financial planner. He is the director and chief financial planner at Holistic Investment Planners, a leading financial planning and wealth management company.
© 2025