Job loss ranks as one of the most stressful events a person can encounter during their lives, right up there with divorce, a serious illness, or the death of a loved one. While the stress of receiving a pay cut or losing your job can seem overwhelming, there are many things you can do to maintain your spirits, take control of the situation, and find hope amidst the circumstances.
Check out our list of some of the most important steps you should take in order to ease your stress and help you overcome setbacks if you have lost your job or are working reduced hours.
Apply for Unemployment Benefits
There are a variety of benefits and aid programs that will provide partial income replacement for a defined length of time or until the worker finds new employment. These unemployment benefits can help in supporting workers experiencing unemployment and avoid families to slip into poverty as they try to find new jobs. Nonetheless, it is important to note that the requirements for unemployment claims and temporary assistance may vary depending on the state you reside in.
Cut All Non-Essential Expenses
By eliminating unnecessary expenses, you can free up cash to cover your essentials and also keep yourself from acquiring new debt, which will bring more financial stress in the long run. With little to no income, you need to incorporate cost-cutting techniques to slash expenses in line with your new financial situation right away.
You can do this by trimming your monthly subscriptions, refinancing your auto loan, freezing your memberships, etc. Another key step to cut non-essential expenses is to stop hiring other people to do the services that you can do by yourself. This includes laundry, car wash, dining out, and other basic services. Also, avoid the mistake of assuming that you’ll get a higher paying job as an excuse to spend more money.
Create a New Budget
Once you cut all non-essential expenses, it is crucial that you take the time to formally adjust your budget. By sticking to an updated budget plan and having a budget planner, you can avoid digging yourself into financial hardship later on. Once you have a good estimate of your monthly spending, identify what’s essential and what can you live without until you’re back on your feet financially.
Start by focusing on your four walls: food, utilities, shelter, and transportation. By prioritizing these things, you can trim down your spending and still be able to feed your family, keep the lights on, pay the mortgage or rent, and put enough gas in the car to travel to the places that you need to go.
Track Your Spending
Creating a monthly budget is just one part, and sticking to your budget is another. By tracking your spending on a regular basis, you can have an accurate picture of where your money is going. A powerful way to monitor your expenses is to log in every dollar spent to make sure you don’t overspend in any area.
While this may seem to be a tedious task, consistently tracking your expenses will help you control your finances and promote better financial habits. You can also download free budget apps and spending tracker apps to help you manage your expenses and put you on a better financial footing.
Borrow Money Wisely
Taking personal loans can be helpful if you are borrowing the money to acquire something that you truly need, shop around for the best value, and forecast if you have the capacity to afford the next monthly payment for the entire length of the debt. However, it is important to avoid using loans for anything beyond your basic necessities and be aware of all fees that will apply to your credit card or loan.
Contact Your Landlord and Creditors
Once you’ve implemented a budget plan, you can now try to negotiate with your landlord to lower the rates you pay monthly for rent and mortgage. You can start by explaining your situation and then try to negotiate some relief there. This also applies to loan creditors and lenders that you owe. The good news is that many credit card companies offer relief programs that are designed to aid customers who are experiencing financial hardships.
If you find that you cannot afford to pay a lender on time, respond promptly to their phone calls and explain your financial situation so both parties can agree to a lowered rate or eliminate some of the fees charged. You may also want to consolidate your loans into a single monthly payment with a lower interest rate to get your finances in order.
Downsize Your Home/Apartment
If you own a home, check if refinancing your mortgage would lower your monthly payment or lease agreement if you’re renting an apartment. Another option is to consider adding a renter or roommate whom you can share your expenses with. It’s a win-win situation for you and your new roommate since both of you could get a much lower monthly rent.
Get a Part-Time Job
Having side hustles can help bring cash in and stretch your remaining money after losing a job or being laid off. Finding side jobs is easier than many people think and the vast majority of them are incredibly flexible.
Although the amount you’ll get from these side jobs may not be as much as your previous income and is unlikely to come with any employee benefits, these paychecks can keep you afloat longer during a period of unemployment. Consider applying for a part-time job in your field while you actively pursue your job search.
Work on Your Skills
If you have a keen eye for photography or can write really well, you can sell your talents and work as a freelancer for other people or companies to find a way to make some extra money. But if you’re still not confident with your skills and talents, you can always take up online courses, read books, and seek advice from mentors to take your skills to the next level.