Getting laid off affects us mentally, emotionally, spiritually and most importantly, financially. There comes the issue of living with less money. While there may be severance pay and unemployment insurance to support us, these won’t be able to sustain our lifestyles in the long run. As such, it is important to be practical and thrifty – and the sooner we live like it, the higher the chances that we will survive this time of our lives.
As such, here are some tips on how to get by during this difficult time.
This is one big mistake that many make after losing a job. They think that they will only be unemployed for a short period of time, and that they will get another job that pays as much, or even more in no time. However, the consequences of thinking this way can be devastating.
It’s alright, and even great to be upbeat when it comes to searching for a job. However, your financial standing needs a more serious and focused mindset.
The problem with thinking that the unemployment is temporary, is that your lifestyle really won’t change because you think you’ll be getting a new job soon. Your spending habits stay the same, even if you make less or nothing at all. Severance pay and unemployment insurance can sustain you for a month or two, but may not be able to handle your finances if you remain unemployed for a few more months.
As such, it is a given that you will need to find a new job as soon as possible, however, it is still much better to assume the worst and prepare.
You need to cut down any expenses that are not really necessary, and this needs to be done as soon as possible. If you are given enough lead time about the layoff, it is better to terminate any subscriptions that you have before you leave the company. If not, then immediately after your last day of employment will also do.
Take a look at your bank records for the last six months and identify where your money goes. Do you have premium cable channels on your television? Do you have a gym membership that you don’t use as much? Do you belong to an exclusive club that you don’t really go to? Eliminate these things that you find unnecessary to help you save up more money. Consider looking at your possessions as well. If you have three cars in the household but only two are really being used, then maybe it’s time to let go of the other to save up and gain income.
When it comes to buying food, consider clipping coupons and use them on your next trip to the grocery. Find out when the discount or double-the-coupon days are, to make the most out of what you have. Go to a food discount store, which do not make use of coupons, but generally have lower prices compared to other stores.
You may also want to consider getting your clothes from consignment and thrift shops. While the choices may be limited, but the quality and brands that you will find can make up for it.
Also, plan your trips ahead to save up on gas and cut on mileage. Whenever possible, consolidate trips with your family and friends. Take note that you are not only trying to save up on gas, but also the wear and tear that the car has that can also lead to expensive repair bills. When you’re outside, try to stay out of stores – the longer you spend inside them, the higher the likelihood that you will spend. Consider putting window shopping on hold for now.
If you enrolled for healthcare with your previous employer, then you can do either of the following:
With the above options, the first one is usually going to be the most expensive – because you are now shouldering the premium as a whole. However, this could be detrimental to your finances, even if it provides the most comprehensive privileges. As much as possible, don’t consider option 3. You never know when unforeseen incidents could occur and a healthcare insurance could be your best bet against debt if you have no money to spare. Note that unemployment and the lack of health insurance could possibly result in you filing for bankruptcy.
As such, the best option is the second one – to find the least expensive health insurance that you can afford. By talking to reliable and dependable insurance brokers, they can help you find the best plans available for your current standing. Ask your family and friends for referrals for added confidence that you will not be ripped off.
While this is not the most advertised way of handling your credit, your main focus is to maximize the cash that you have right now. And this won’t be possible if you continue making additional principal payments to your cards. During this time, it is best that you just meet the minimum required for the month, and keep the rest of what you have to pay for other expenses that are necessary. Upon re-employment, you can pay off your credit card balance with a renewed sense of purpose.
By learning how to live with less, you can exercise greater control over your finances until you have a new job. A job loss need not always be a bad thing, as it helps us to live and appreciate what we have, and it teaches us lessons that will stick with us for a lifetime.