If you lose your job as I did, you should not panic. Although being unemployed can be devastating, it is not the end of the world. Of course, you will have to adjust your finances until you get another job. You will also have to file for unemployment benefits so you will have enough to get by. According to a report by outplacement consultancy firm Challenger, Gray & Christmas, “US job cuts hit a nearly four-year high in July” as the military and the technology sectors announced layoffs. In addition, Hewlett-Packard also announced in September that it would lay off some 10% of its workforce, or 28,000 to 33,000 workers.
Four Things You Should Do With Money
Here are the four things that you should immediately do after you become suddenly unemployed:
1. Take stock of your resources. This is the one thing you should immediately do. Look at the amount of your savings, and then ask yourself, how long can I make it last? If you can get unemployment benefits, would they be enough for you to live on, and how much would you have to add from your savings in order to get by? In addition, look over any alternate sources of income you may have.
2. Create a revised budget. Now that you are unemployed and have no regular source of income other than unemployment benefits, assuming that you qualify, you need to downsize your standard of living. Look over all of your expenses and consider areas in which you can cut down. Start by removing the small luxuries you used to take for granted, such as eating out weekly and having a daily cup of coffee from the local Starbucks. Then look at all your other expense categories and look for other areas where you can economize. For example, you can look for cheaper food options without sacrificing nutritional value.
To make your budget more effective, you might want to do it on a weekly basis rather than the typical monthly. Since you no longer have a monthly paycheck to allocate, making a weekly budget allows you to take tighter control over your expenses and stretch your money.
3. Look into your health insurance options. Although it may seem that health insurance is an unnecessary expense when you have no regular income coming in, it is actually more of a necessity than ever. Although you may be healthy now, you cannot rule out the possibility that you might suddenly get sick or be in an accident that would require you to seek medical care or even be hospitalized. Under the Affordable Care Act, unemployed individuals and families can look for a Marketplace plan which may qualify you for savings and credits that would substantially reduce your premiums and Medicaid for those with limited incomes. In addition, if you have children, you may qualify for the Children’s Health Insurance Program based on your income.
4. Prioritize your expenses. Now that money is scarce, you should also make sure to pay your most important bills first. The five most important spending items that you should prioritize are your mortgage or rent, your utilities, food expenses, health and other insurance and medicine.
However, one thing you should not do is spend precious money paying down your debt. Even though you’ll be debt-free, being unemployed means you’ll have trouble getting additional credit when you need it. Instead, call your creditors and tell them that you’re jobless and enter into an agreement with them for you to pay the minimum amount to service your debts.
There are signs of hope in the economy. The unemployment rate recently hit 5.1% and there were 173,000 new jobs in August. A senior economist at Principal Global Investors said that the US job situation is still “moving in the right direction”. But it can still be very difficult to find a new job. So it is very important that you follow these tips to manage your money until you’re gainfully employed again. In fact, these techniques can even ensure that you don’t have to accept the first job that comes along and you might be able to wait until you can find a better opportunity or even a new career!
About the Author
Bill Achola is a personal finance publisher who owns a fast-growing, dynamic and innovative investment blog that empowers investors to make the right investment decision. To learn more, visit http://traderushreview.us.com