What or who do you rely on to earn an income?

Bus schedule earn incomeYOU ARE YOUR INCOME SOURCE

 

We all need to earn an income to survive in this crazy world. Many people jump in their vehicle or rely on other community services in the morning to go to work. Typical day… maybe.

What would happen if there was no more bus service or our vehicle stopped running?

I never gave much thought about who or what I rely on to earn an income until this past week.

I think plenty of people worry more about whether they will keep their job over how they will get to their job and other so-called slight factors that would cause an impeding problem to their income. To call them slight would be a huge mistake.

Many of us live life similar to everyone else who gets up in the morning, eats breakfast, showers, sorts the family out and is off to work. Of course depending on your work schedule that might not be the way it rolls in your household but you know what I mean.

I remember posting that when my wife and I bought a house we bought it on one income so we had almost a free income to work with just in case something should happen. I don’t think at the time it was because we thought anything would happen it was more about how can we save money and pay off the mortgage fast so we can be free from debt? Something could have happened and that should have been priority thinking for us along with saving and paying down debt.

Moving forward now that we are debt free and the mortgage is gone we were talking about what would have happened if someone or something we relied on to earn an income went belly up. What are some of the things that could happen to us? These are likely the questions we should have asked ourselves far before we were debt free and hopefully questions you might be asking yourselves.

Keep in mind if you are single and there is only one income source you are the only one you rely on however some people forget that. We put so much faith in the system to work in our favour that the minute something goes wrong we blame everything that’s happening around us rather that ourselves. I agree that not everything in life will go as planned but the number one thing I’ve learned is to have a plan B. I’m not only talking about money but I’m also talking about how to get to where you need to go in order to earn an income.

In speaking with a neighbour of ours her daughter got into her first vehicle (hopefully last) accident (no she was not hurt physically) and is now scared to drive or get into a vehicle.  Although this fear may pass now she is forced to either ride a bike, take a cab or use city transit. It made us think about what if those variables were taken away? How would she get to where she needs to go to earn a living?

In light of pondering the above situations and chatting with my wife we came up with a list of ways of who or what the general public might rely on in order to earn their income. Although having an emergency savings fund is paramount for everyone there are other things to consider as well.

 

Job

 

The most obvious way we rely on income is from our job. Sometimes we put TOO MUCH faith in our career believing that we are in a secure position until the pink slip is handed to us. I know many people who have back-up plans when it comes to earning income aside from their full-time or part-time job but many who don’t.

What would you do in the event you lost your job? If you earn an income by working online and freelancing what would you do if no projects were coming in? Some people give up their job to stay home and earn a living in the comfort of their own home but at any point that could all disappear or become slow in nature, meaning work is hard to come by. You may run a day care from home but if you lost a few kids all of a sudden how would that impact your income? It might take weeks to fill those vacant spots. Are you prepared?

Sometimes it takes weeks or even months for Employment Insurance to kick in if you qualify and if you have no money stashed in the bank, you might be out of luck. Finding a new job could take ages and some people never do find another job and are faced with options they would rather not take but are forced to.

Sure you can rely on the food bank to get food but you still need money to pay the bills.  What is your plan B? You may work in a union environment and go on strike or face a lock-out. Not only does the union worker suffer the citizens will suffer as well if they provide a service. I know that essential services must keep running but not everything is deemed “essential” in a unionized or non-unionized environment.

You may not have wanted that but that’s the way the bucket rolls when a union and employer are involved. Forget about any decent money coming in because now you have to work the picket lines and hope that you can get back to work as soon as possible. Most bill collectors won’t care if you tell them the reasons why you can’t pay but some might, just don’t rely on it.

Rely on yourself. Putting all your financial eggs into the credit card, credit line and other means when the going gets rough is difficult to get out of so plan ahead the best you can. If you find you’re in the above situation try not to get too comfy using money that you still have to pay back. Find anything you can to get money coming back into the bank account.

 

Transportation

 

Here’s something that I bet plenty of people don’t throw their arms in the air about until something happens. What if you rely on community services to go to work such as the transit system, Go Train or the subway? I’m pretty sure if you take a plane to work you can source out a different mode of transportation but not everyone is so fortunate.

Taking the bus, Go Train or subway is not for low-income people who can’t afford to buy a car either so get that notion out of your head. I took the bus to school every day when I moved to Canada and if that service was interrupted I would have had to find alternate transportation or walk about 2 hours. However, that was my problem to deal with and no amount of complaining would pay my bills.

Our neighbour is a professor and she takes the bus to work because she enjoys the ride. Many of our friends use the subway because parking is costly in the GTA and it’s horrible trying to find parking spots.

To think that community services in the transportation sector can’t shut down is to turn a blind eye because they can and with no notice. If a lock-out or strike happens you may be forced to put that plan B into effect and you better hope you have one. How long this will last is anyone’s guess but transportation is an essential service for many Canadians and could cause financial hardship in their lives. Whether it is deemed essential by the people in power is another story.

Should you have a plan B, absolutely? Not everyone can ride a bike but that’s a great option but if you don’t own a bike you now have to buy one. Can you afford that? Taking a cab is another option but that could get very pricey.

Relying on friends, family and car-pooling until services are up and running again might ease the situation. There is no easy answer but the same goes if your vehicle were to die on you. If you have no vehicle then you need to have a plan to get to work. We can’t rely on the system because in the end blame shifting gets us nowhere.

You may have never taken a city bus to work and now may have to get used to it until you can afford a new vehicle. If you live in an area where there is no bus service it’s even more important to prepare ahead because your boss might not be as sympathetic as you think. Besides can you really afford to lose income from not working every day?

 

Health

 

Without good health we may be forced to quit our jobs or find something that is more suitable. If you were making a decent income over the years you might be faced with working in a lower income job but the reality is, it happens. Believing that our health is going to be great because we work-out every day or eat healthy is nonsense.

A friend of mine who went to the gym every day of his life is battling cancer right now. Sure it helps but don’t believe that you are shielded from illness because the masses say it’s the healthy way to go. No one knows when an illness will strike so we must be prepared. Sure we can apply for disability if we qualify or employment insurance etc. but most times people struggle through the system.

If you bought critical illness insurance or have any other health coverage that will get you through your illness away from your job or permanent departure it’s better than having nothing at all. Not everyone has work benefits either so think about what you would do in the event something were to happen to your health or that of your partner.

 

Family/Friends/Child Support

 

If you are someone who relies on family or friends to pay your way you might have the shock of your life when they tell you to bugger off one day. We have a friend who is in his 30’s and lives with his grandma and says he takes care of her.

He gets free rent, food and spending money from her. He has no desire to find a job and enjoys living in the life of luxury, for now. One day she won’t be around sadly and life will smack him in the face. Relying on your parents for cash is another no-no. Get a job. If you are a student there is no reason that you can’t find summer work even if it is picking weeds for your neighbour.

If you are unable to work due to health reasons but still need cash realize that this might not last forever. Unfortunately no matter who we are when it comes to money we have to look out for ourselves unless you have someone dedicated to looking out for you financially for life.

If you are a man or woman who relies on child support every month and are just making ends meet you must think about what happens if that ends? What if your ex loses his/her job and can’t pay any longer? How will that affect your income? I know it’s not something we want to think about especially if there is animosity in the relationship/friendship but you must. It’s better to be ahead of the game than finding ways to catch up.

 

Government Services

 

Like I mentioned above relying on income coming in on time or at all from employment insurance, social services (welfare) or any other government services in which you may qualify could hurt your income stream.

Sure, some people in these situations might not have any savings to rely on or they may not be allowed to claim with such savings but again having a plan B is better than pulling your hair out when you have no money coming in at all.

 

Insurance companies

 

This is one income source that most people who are faced with the situation want to throw in the towel and bury their heads. Fighting insurance companies because you were injured on the job, are now disabled or ill is not something anyone wants to go through. You might be waiting for months if not years to get a final verdict. Hiring a lawyer or paralegal may hit your budget hard, which is if you can afford one.

If you are receiving funds from such companies be aware that at any time they can turn around and stop paying you for whatever reason. I won’t get too much into this as it deserves a blog post on its own but don’t relax all your muscles when the income comes in. You will always be sitting on the edge of your seat when you rely on someone else to fund your income stream and you have no control over it.

 

Retirement income

 

If you are already retired you may be faced with not knowing what could happen to your money or you already know. You may have lost money over the years and don’t have as much as you planned to have in order to retire.

If you were lucky you made lots of money and are able to live your retirement out as planned. Even if you don’t have lots of income coming in you can still live your retirement dreams but what happens when your retirement dreams are shattered?

We’ve all heard of seniors losing their entire retirement funds due to scams they’ve fallen prey to. It’s so important to protect what you’ve got and to stay on top of it. If you are unable to then you must find someone you trust to take you into those retirement years so the income is available.

You may also rely on old age security or the Canada pension plan. You might rely on selling your house for extra income when you retire.

All of these can come to a halt or you might not get as much money as you thought to fund your yearly income stream as expected. Planning is great when it comes to retiring but until we get there we won’t know exactly how all those years of investing the day we hang up the work suits and uniforms how much our income will truly be.

Now, we could be missing out on many other ways on who or what YOU rely on to earn an income but this post is mainly about Finance for Thought because if we don’t put the bug in our heads we may think about it only when it’s too late.

If earning extra income with a second job or hobby is something you are doing now, kudos to you. If you are investing your money to earn dividends or other funds, good for you. If you are budgeting your money and saving for a rainy day, good for you. If you are planning ahead even better.

Not everyone has these luxuries but we all have one thing in common, we must live. So in order to live we must rely on ourselves first financially and think about who and what we will rely on for income.

Who or what do you rely on when it comes to income earning?

 

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Mr. CBB
Mr. CBB was born and raised in the United Kingdom who then moved to Canada where he is a permanent resident. He recently became a father to a very busy toddler who allows him to be a kid at heart. He bought his first house at the age of 21 after University and his second at the age of 24. Both Mr.CBB and his wife are Debt and Mortgage Free and they did it all in under 5 years using a Budget. Canadian Budget Binder is a place where he shares their financial experiences with his readers and hopes to learn about theirs. Welcome to CBB!
Mr. CBB
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Comments

  1. Risking to sound as a neo liberal airhead (and I dislike neoliberalism with passion) I’d say that I rely on myself in two ways. First, I rely on myself by maintaining competence set that gets me into the highest echelons of my profession; I also have multiplicity of site hustles. Second, I rely myself to make clever investments that go beyond stocks and shares; I’ve been looking at and investing in opportunities than bring monthly income. This way, between my husband and me we have five different income streams. Of course these are very different in size.

    • Good for you Maria. It’s better to be ahead of the game so if the time should come that you are in need it won’t hurt the budget too much.

  2. Our income comes from job income from me, independent contractor income from my husband, rental income from a boarder and our daughter and some survivor benefits income for my husband from his deceased wife. It’s seems like a lot but it never seems like enough when unexpected expenses come up! We are managing but also on an aggressive debt repayment plan. If we did not have the rental income it would be much more difficult. Every bit helps!

    • Today I’m questioning whether people have thought about what they would do in the event that something should go wrong. Many people turn a blind eye until it’s too late because they are just making it. Sometimes that can be a hard hit to take when and if the time comes.

  3. Christine Weadick says:

    We lived through the sale of the plant where hubby worked years ago. The rumor mill was something else!!!!! It all worked out for us in the long run back then but we were considering our options for sure.
    Now he is retired due to his health issues and we get Canada Pension-Disability, at least until he turns 65. Assuming he makes it until then, definately something we have to keep in mind. He also gets Ontario Disability Supplemental which is asset based. I don’t work as I am care-giver and the only driver in the family. Hubby can get behind the wheel but only if he has a qualified driver with him, which means me.
    I can pick up a few bucks here and there doing sewing and alterations for people. It isn’t much but it is something. I have done bridal alterations for a friend that has a shop and I know I can go back to her and make what ever doing alterations for her. A hundred dollars here or there could come in handy but I do balance that off with the stress of doing the work and a perfectionist streak.
    Our daughter is a single Mom and has moved closer to her work to save money and hassles with traffic and such. Now the Little Mr can go to work with her as she works in a daycare. He’s there now for the summer and come fall, his before and after school programs. She is further away from us but I no longer need to worry about her on the roads so much this winter.
    A very good article and somethings to think about here….

    • Thanks Christine. The article is meant to get people thinking about this stuff ahead of time. You were lucky but had it gone the other way things may be different for you. 🙂

  4. I don’t rely so much on my family for things but we do trade things around that one of us might that the other does not. For example my parents just gave us some corn on the cob, and zucchini or if we are in a pinch they might watch our kids for us but we are happy to repay them back with favors as well. With family and friends it’s usually give and take which is kind of nice to have. Now if this stuff were to all go away we could survive for the most part.

    • What would happen if your vehicle broke down or your only way to work was to take the bus? What if you were injured on the job? Are you prepared for such occasions? It sounds like so much we have to think about and for some they play it by ear but others they think about these potential situations in hopes it doesn’t bring them down if they should happen. Cheers Chris!

  5. Pat Ciulka says:

    Great article Mr.CBB! You are right many people don’t consider the ‘what ifs’ This has happened to us recently where we went from 2 incomes to one with out warning. Because we were prepared we managed to maintain all our financial obligations. Our lifestyle was a little more low key ( no dinners out etc…) but overall we managed comfortably for 14 weeks. We did this without dipping into our savings because we were prepared! We have a back up plan if a vehicle breaks down as we live in the country and public transportation isn’t an option. We have tried to cover all our bases but you never know what life will bring.

  6. We’re social creatures, so I guess it’s already destined by nature that we will need somebody/something else to survive. Nevertheless, this the reason why I prefer to work for myself. If you work for other people your future is pretty much depends on them while being an entrepreneur/freelancer lets you ‘create’ your own future and how you want to make it.

  7. Health is a big deal. I think we assume too much that our health is always going to stay the same. But anything can happen in an instant to change that and it may impact whether or not we can work. My wife and I are looking into long-term disability insurance as a way to mitigate the loss of job due to health issue. I know it won’t make up for all the income we would have received from employment but at least it will provide something to see us through.

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