Job loss can be financially, emotionally, and mentally unsettling. Paying bills and catering for daily necessities becomes stressful, mainly if your next paycheck isn’t assured. Considering how unpredictable today’s job market is, learning how to manage finances after losing your job can make survival easier as you look for new employment opportunities. This article outlines five money management tips after a job loss.
1. Apply For The Unemployment Benefits Program You Qualify For
Unemployment benefit programs safeguard workers from significant income losses during a job loss. They help them meet their basic needs to ensure they don’t sell their assets while reducing the side effects of job loss. Leveraging an unemployment benefits program allows you to look for a job that best suits your skills. After losing your job, look for the unemployment benefit programs you qualify for.
For instance, if you’re diagnosed with a physical or mental disability that impacts your ability to make a livelihood, research AISH eligibility to ensure you qualify for the monetary benefits that cover personal needs, lodging, health, and child care before applying. Familiarize yourself with the relevant benefit program’s maximum duration and find new sources of income before that time lapses.
2. Adjust Your Budget
Losing your primary income source requires significant financial adjustments to help account for your income loss while staying afloat. Adjusting your budget enables you to make wise financial decisions to avoid hardships. Consider building a budget worksheet, including income, flexible expenses, and fixed expenses columns to help you track your spending habits and make wise decisions regarding how to spend the unemployment benefits you may get.
Eliminate or cut down on unnecessary expenses to make it easier to survive in these uncertain financial times. Assess your income and distribute it to cover the mandatory expenses. Once your budget is ready, sticking to it can help you become more financially disciplined.
3. Limit Credit Card Spending
Credit card debt, especially when unemployed, can be financially distressing. Since credit card spending can quickly get out of hand if uncontrolled, limiting usage can help you stay financially sound. You can restrict credit card usage to emergencies only and only charge whatever you can comfortably repay within a reasonable period. Don’t transfer balances from one credit card to another because balance transfers usually have high-interest rates. You may also avoid credit card usage to avoid debt. Consider leveraging credit cards with reward systems to save money.
4. Find Other Income Sources
Looking for gigs, especially after a job loss, is an excellent way to supplement the little money you have, making it easier to manage your finances. Since finding a full-time job may not be easy, look for temporary or part-time jobs. You can learn new skills to help you find a gig quickly. Besides earning an extra income, finding gigs can help bridge your resume gaps. Consider self-employment opportunities you can venture into.
5. Use The Emergency Fund As The Last Option
An emergency fund covers unexpected life events, such as job loss. If you’ve built an emergency fund during your working days and have no other source of income, you can live off it without getting into debt until you find a new job.
Surviving after losing a job can be challenging, especially without a proper plan. Consider using these money management tips after a job loss for sound financial health.