6 Tips on How to Survive a Sudden Loss of Income

3. Draw on your assets with a great plan

During or after this pandemic, you may need to spend your savings or take on some short-term debts. That’s why you should create a good plan for using those assets. First, you should look to your “liquid” assets, drawing on cash savings accounts and non-retirement investments.

Also, write down the pros and cons of taking some credit. If you decide that a credit is a feasible option, you should look for low interest rates, low fees and favorable terms. And think about what a new monthly payment structure will mean to your budget.

In times of financial hardship, cashing your retirement savings out might be a good idea. However, you should know that there may be penalties up to 10 percent for cashing out a 401K before retirement age, and you may have to pay income taxes on any portion that you cash out.