HNE Staff Losing a job or getting a pay cut is scarier during this pandemic. But there is still hope, something to look forward to financially if you know how to budget your savings while looking for another job. Read some budgeting tips to help keep your spending on track. It might be a challenge if you’re feeding a family, but you will get through this horrible experience.
Here are 10 of the top budgeting tips you can follow if you’re unemployed:
1. Find Sources of Benefits and Supplemental Income
Unemployed people in your state may qualify for benefits from unemployment insurance, thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Reach out to your respective states’ unemployment office because policies vary from one state to another. Some unemployment benefits may last for at least 26 weeks. However, you can only claim it due to contract termination or getting fired for reasons other than misconduct.
If you have been laid off or lost your job due to redundancy, you might be entitled to severance pay and/or health insurance for a certain period. Some employers also offer retraining, counseling, assistance in finding a new employer.
Look for temporary or part-time jobs. There are more of these than full-time work. If you’re receiving unemployment benefits, check if your temporary employment might affect the support you are getting.
Sell some of the things you don’t need or use. Offer your services to whoever may need them.
2. Assess Your Current Debts
Review your existing debts, from the car loan and credit cards to mortgages. Despite how overwhelming it can be at first, laying all your debts out can help you create a realistic plan to pay them off. Do it on a spreadsheet, app, or even a simple list. Take note of the lender, balance, minimum payment required, and due date.
3. Set Up a Spending Plan
Knowing how much debt you’re in and what bills you should prioritize, it’s time to develop a spending plan. Start with making a budget per week or month for the necessities, like food, rent, and utilities. Consider the remaining sources of income you have and the potential government support you can get. Cut down on luxuries until you get your regular paycheck back.
4. Sign Up for Credit Counseling
Ask for help from experienced credit counseling organizations. Tell them about your financial difficulties so they can help you polish your budget and payments.
To choose the right credit counselors, ask them about their services, free informative materials, service fees, state license, and training and accreditation.
5. Stick to Minimum Debt Payments
If you’ve been paying extra on your credit card balance, pause it for now. Pay the minimum amount required to avoid running low on cash for the essentials. Once you’re back on your feet, you can go back to paying more.
If you can’t even reach the minimum payment, talk to your credit card issuer. Tell them about your predicament and what financial relief is available to you. If not, you can apply for a balance transfer that will move your existing balance with a high-interest rate to a card with zero interest as its introduction promo.
6. Focus on the Basics
By basics, it means food, shelter, transportation, and utilities. Put food on the table. Keep the lights and the water on. Gas up to get you around whenever it’s needed. Don’t miss paying for your mortgage or rent. Otherwise, you would lose not only your monthly income but also your health and security.
7. Cut Your Spending
The lower your income is, the lower your family’s expenses should be. Here are some budgeting tips you can do to reduce your spending:
- Reduce your mobile, Internet, and cable bill.
- Plan your meals and trips to the grocery store or markets.
- Shop in bulk.
- Buy generic brands.
- Shop during sales or use vouchers and coupons.
- Reduce your transportation expenses by cutting back on car use, using only a single car, or commuting via public transportation.
- Assess your consumption of luxury items, such as dine-ins, gym memberships, entertainment subscriptions, and personal care expenses.
8. Refinance or Consolidate Your Debt
Consolidating debts from multiple creditors makes it easier to monitor your payment progress. Find a debt consolidation loan with a lower interest rate and monthly due. Don’t go for just about any debt settlement offer.
You can refinance your mortgage as well to reduce your monthly bill.
If you’re renting, tell your landlord about your financial struggle. They might be amenable to more favorable terms for you instead of looking for a new tenant.
9. Use Your Emergency Savings
You saved money for months or years for times like these when you don’t have your usual source of income. Use it to pay for the essentials until you can find a new job.
10. Find Work
Tell people that you are job hunting. Use your network of friends and former colleagues to look for job leads. Focus on your job search before your unemployment benefits and emergency savings run out. The sooner you can find one, the better.
You can also earn money from home. Learn the common ways to earn money while working safely from home.
Losing a job is hard, but know that it is temporary. Work with your budget while providing for your necessities. Given the budgeting tips above, you’re now prepared to tackle the problem emotionally and mentally. Once you find work, you’ll be wiser and stronger financially than before.
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