Letter of Explanation for Declining Income

There comes a time when we need to write a letter of explanation for any reason. There are different ups and downs in life. At times, we get into severe financial crises due to our low income. When this happens, we are left with no option but to seek financial assistance. For that purpose, we can write the explanation letter to the person we are seeking assistance from.

Why it is important to write an explanation for declining income?

In many situations, a person gets into trouble because of not being able to make ends meet. These days, we can see people going through a financial crisis due to COVID-19. Similarly, some people fall ill and suffer from declining income. Some people face problems due to the sudden collapse of their source of income. For example, a student who was once able to pay the fee now cannot pay because of the sudden death of his father. In all these situations, people have two options: to quit or to try harder. Those who don’t believe in giving up look for other options.

To ask for financial help, you are required to give a complete explanation of how the decline in your income occurred and when it is going to be okay. If the reason is genuine for the recipient, he will help you.

What to write in the letter of explanation for declining income?

This is a brief letter in which you have to explain of as to how your income is declining causing you to ask for assistance. Not that this letter will work for you only when you have never taken the assistance before and now you are in the dire need of it.

While writing the explanation, you are required to remember the background of the letter and the purpose of writing this letter. For example, when you know that you are writing this letter to persuade the reader into giving you financial aid, you should write the letter according to your need. Apart from this, there is so much that needs to be taken into consideration.

When to write the explanation letter?

When people need help, they ask for it. In response to it, the recipient asks him to give an explanation that is satisfactory for the recipient to help him. In that situation, that person needing money has to write an explanation letter.

The explanation letter is not just written in response. When someone is not able to pay the bill, he can write the billing company with an explanation letter telling it about the crisis. As a result, the company can either cut the billing amount to half or reject the explanation based on how it has been written. The person who is writing this letter should make sure that he provides all the supporting documents that the recipient needs to confirm what you have claimed to be true in the letter such as the income statement.

Sample letter:

Name of the sender

Address of the sender


Subject: explanation of declining income

Dear Mr. XYZ,

I am writing this letter to explain the reason for declining income from the previous year. At the start of 2020, my wife was diagnosed with a brain tumor. She was not able to work like she used to do before. Due to her declining performance and health, she was laid off from work. At the time when we were in a precarious financial situation already, I had to arrange money for her treatment also.

Since I was the only person at home responsible to bring home the bacon, I was barely paying the bills and house mortgage. Because I was also managing the treatment expenses of my wife, my all expenses skyrocketed.

I am applying for different financial grants because I am in dire need to get the grant to continue my education.

I am attaching my bank statement along with proof of declining income that will let you know why I am not able to pay my fee. I would like to say thanks to you for all the time you gave to me. I am looking forward to hearing from you.




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