Job loss can happen to anyone at any time, and when it comes as a surprise, there often isn’t new employment lined up. This can make you feel angry and vulnerable, and you can’t help but worry about how you will cover all of your expenses.
However, even if you have been dealing with surprise job loss, there are ways you can take control of your financial situation and survive until your circumstances turn around.
The first thing you should do to ensure you are financially stable after a job loss is to write a budget and make sure you are following it closely. This way you can minimize any unnecessary expenses, and you will know exactly how much money is needed for your monthly expenses.
There are many resources online to explain the fundamentals of budgeting.
If you lose your job, you are definitely going to need to reduce your spending, at least until you find new employment. Your budget should help you identify any extra money you are spending, like on coffee or entertainment, so you can cut that spending.
This is also a good time to check to see how much you are paying for certain bills, like your cable, internet, or phone bills. Call any companies with which you have bills, and see if there is any way to lower your monthly payments. Also, check to see if there are any options that are more affordable.
One way to cut daily spending is to track it with a mobile app. This gives you an easy way to view all your spending in the same place, and log it as it happens.
When you lose your job, you want to make sure you stay up to date on any payments you owe. Because of this, you need to quit saving extra money.
Make sure that your money is being used in a practical way until you find new employment. Also, while paying extra on any debt you owe is generally a good thing, you do not need to pay extra when you are facing job loss. You want to make sure that your money stretches as far as possible just in case you do not find employment in the time frame you expect.
Just because you have lost your job does not mean you do not need to keep up with insurance. You always need health insurance, especially in times of financial struggle.
Medical debt can easily cause financial ruin, especially if someone is underemployed or unemployed. It’s actually the leading cause of bankruptcy in the United States. It’s best to stay informed about the best insurance plans for you and your family and to be educated by researching and understanding how medical debt works.
Another thing you need to do is check to see what types of benefits your employer might offer to someone in your situation. See how long the company you worked for will allow you to stay on its group policy.
The majority of group health and retirement plans comply with the Employee Retirement Income Security Act of 1974, so check with your previous employer to see if you can get any relief.
You will not want to wait long before you contact your creditors if you lose your job. If you are open and discuss your current situation to creditors, you are more likely to receive relief of some sort. For instance, if you are having employment issues, you can often get a deferment to help until you find a new job. It is better to be open and ask than to miss a much needed opportunity.
If you want to have a healthy financial future, it is important to always keep good credit. Not only is good credit needed for many beneficial opportunities, like property ownership, but it also keeps your payments and bills lower. Contacting your creditors to seek payment relief and paying what you do owe on time should keep your credit score from being destroyed.
If you have exhausted your other options and you are still trying to find a way to pay your bills you might have to get creative. You can start by selling some of your own items, like clothes, at a garage sale or online.
You could even get a roommate. If necessary sell your car so that you can at least keep your credit up. You can borrow from your 401k before retirement also, but be aware that there is a huge penalty. Consider this penalty, and borrow from your retirement fund only as one of your last measures. Finally, if you do not find a job quickly enough, you might be able to file for bankruptcy, but remember the consequences on your credit and life. However, if you do find yourself in the situation where bankruptcy is the best or only option for you, you must do what you have to in order to move forward out of the current situation.
Job loss might leave you feeling vulnerable and anxious, but don’t let it keep you from being financially responsible in the meantime. Take control of your money and use it to the best of your ability until you find new employment. Make sure you are working toward financial security no matter what you situation, even if you are dealing with job loss.