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Facing a Reduction in Income? Here’s What You Should DoFacing a Reduction in Income? Here’s What You Should Do

Merely saying that things are difficult right now feels like a massive understatement. Did you know that the decisions you are make right now will have long-lasting implications on your future? Find out the hard-yet-necessary things you can do today if you’re facing a reduced income.

Merely saying that things are difficult right now feels like a massive understatement but there are some hard-yet-necessary things you can do right now if you’re facing a reduced income.

Create a budget

The first thing I recommend is to get a tight grip on your spending and create a realistic budget.

I’ve found that when people really start paying attention to precisely where money is going, it becomes much easier to slash expenses and save.

Explore CARES Act options

The CARES Act offers several provisions, including mortgage forbearance for up to 360 days and, as a last resort, penalty-free withdrawals from your tax-deferred retirement accounts (such as a 401(k) or IRA) of up to $100,000. You have until the end of 2020 to do this.

I strongly encourage you to think very carefully before tapping into your retirement savings. While, thankfully, you won’t get hit with the usual 10% penalty for taking a withdrawal before age 59½, you will still eventually have to pay taxes on any withdrawals (the upside is that you’ll have three years to do it).

Consider refinancing

For homeowners, right now might be the ideal time to refinance your mortgage to a lower interest rate. The key is to reduce monthly outflow and conserve cash, even if it means refinancing to a 20 or 30-year loan. While you have a lot of decisions to make, it’s imperative that you make the absolute best choices for your unique situation. Because some of these approaches are complex, if you aren’t already, procuring the help of a fiduciary advisor, is something you should consider.

Lastly, keep yourself protected for the future. While you need to cut expenses, you also need to make certain they are the right expenses. I’m referring to things like insurance coverage. Try not to let any key coverage slide or, I’m sorry to say, you run the risk of making a bad situation even worse.

Unfortunately, this is high-stakes financial chess, and the decisions you make right now will have long-lasting implications.

Know your options and continue to do your best to stay on course.

We will get through this.

Michelle Yates | Financial Advisor

Michelle Yates joined RAA in February of 2017 and serves as a Financial Advisor. She has over 15 years of financial industry expertise and has supported clients in varying roles with Strategic Wealth Partners, Durbin Bennet – Private Wealth Management, CYRS Wealth Advisors, and AMCORE Bank before joining RAA.

She obtained her BA in Management and Leadership from Judson University in Illinois and holds a Series 65 Uniform Investment Advisor license, a certificate in Paraplanning from the American College of Financial Services, Certified Personal Retirement Specialist (CPRS™), Behavioral Finance Advice (BFA™), and Divorce Financial Analyst (CDFA®) certifications, and is currently working on obtaining her Certified Financial Planner (CFP®) certification. She is also a member of Women in Aviation and is an active member in the North Texas Chapter.

Topics: Financial, Taxes


Over 30 years ago, the pilot-founders of RAA saw the need to provide highly specialized financial services to their colleagues in the pilot community. At the time, there were many financial advisory firms to choose from, but none that focused on the unique needs, desires, and challenges that come with a life spent flying the line. Serving our friends and colleagues in the pilot community is why we are in this business, but how we carry on this legacy is just as important. Times of crisis and turmoil such as this are when we feel we can add the most value and we’re here to answer any questions you have. Request a call with an advisor at or by calling (800) 321-9123.