^{Customers in need of extra care} Managing finances during job loss or salary reduction

Losing a job can be a difficult experience, as the sudden change in income often requires a quick reassessment of your financial situation. It is a time when making the most of your available resources becomes essential. This shift can directly affect your financial stability and daily lifestyle. However, with the right mindset and a practical approach, you can smoothly manage this transition and reduce the risk of harming your credit score. During this period, it is important to stay mindful of key financial responsibilities that may need your attention, such as:

• Managing existing debts
• Covering essential daily expenses, like food, housing, transport, and utilities
• Avoiding over-reliance on loans or family support

While these situations can feel overwhelming, they also present a chance to rebuild stronger financial habits and make thoughtful decisions. In this article we will be guiding you on how to create a clear, structured plan to bounce back into a more stable situation. This includes clarifying your financial priorities, finding support programmes offered by your bank or government, and adjusting your budget to fit your current lifestyle using financial tools.

Managing the financial aspect of the job loss.

When you receive a layoff notice, one of the first concerns that comes to mind is how to manage your financial responsibilities. From loan payments and utility bills to everyday expenses and long-term financial goals, the pressure can be overwhelming. Many people turn to credit cards or seek help from family and friends. While these options can offer temporary relief, they may not be sustainable over time.

What is the best approach?

The best way to start is by taking a clear look at your financial situation. Review your income, current savings, and expenses to understand where you stand. Then, reach out to your bank and speak with a representative. Let them know that you’ve received a layoff notice and explain that you may need support during this period. Banks often have options that can help, but it’s important to be open and proactive in discussing your situation.

Assessing your financial situation

Before making any financial decisions, it’s important to understand exactly where you stand. Start by gathering all relevant information about your finances. This includes:

Once you have a clear picture, categorise your expenses into essential and non-essential. This will help you prioritise and make adjustments where needed. Creating a simple budget or using a budgeting app can also help you stay on track during this period, or you can view our budget planner.

Or you can try doing the 50–30–20 rule, which is a simple and effective budgeting method that helps you manage your money by dividing your income into three main categories:

• 50% Needs: goes toward essential expenses—things you must pay for to live and work.
• 30% wants: covers non-essential expenses—things you enjoy but can live without.
• 20% Savings & Debt repayment: dedicated to improving your financial future.

Importance of managing debt and loan payments

When it comes to paying off your debts and loans, it’s important to take action as soon as you become aware of any instability in your income. Delaying payments can negatively affect your credit score at the Al Etihad Credit Bureau, which may impact your future financial opportunities.

You can always reach out to your bank representative to enquire more.

To maintain timely payments, consider the following options:

Accessing bank support

If you've recently been laid off, many banks offer support to help ease the financial pressure. While the exact options may vary, here are some common forms of assistance you can explore:

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To explore and access these options, it is essential to get in touch with your bank directly. Begin by clearly explaining your current situation and the specific type of support or coverage you are seeking. Bank representatives are typically well-equipped to guide you through the available services that may apply to your case.

Debt-to-income ratio and how to reduce it

While financial products such as loan deferrals, credit card relief, and insurance coverage can offer valuable support during unemployment, it's equally important to stay mindful of the risk of over-indebtedness. This can happen gradually—especially when individuals rely on credit to cover daily expenses, take on new loans, or overlook the need to adjust their spending habits.

Debt-to-Income scores:

A key indicator to watch is the Debt-to-Income Ratio (DTI), which reflects the percentage of your monthly income used to repay debts. A DTI above 50% is considered high risk and may limit your access to future credit or financial services.

To learn more about DTI and calculation, click here.

If your DTI exceeds this threshold, it’s essential to act quickly. Begin by reviewing your financial commitments and identifying areas where you can reduce or restructure payments. Speak with your bank about consolidation options or payment plans, and avoid taking on new debt.

Insurance products, such as income protection or payment protection plans, can also help cover certain obligations during this time.

Final remarks

It’s important to remember that job loss is often the result of external factors—such as company restructuring, shifts in business strategy, or cost-cutting measures—rather than a reflection of your personal performance. These changes are becoming increasingly common, which is why building a strong financial foundation is essential for maintaining stability during uncertain times.

By taking the right steps after a layoff, such as reassessing your finances, seeking available support, and planning ahead, you can navigate this transition with greater confidence and less disruption. In fact, this could be the opportunity you need to explore new paths and discover something even better ahead.