There will be times in everyone’s career when they’re dealt an unlucky hand. Especially in a world where professional competition is so fierce, the odds of being laid off are not often in your favor.
As much as you want to continue working and providing for yourself and your family, there are times when you may encounter the unfortunate circumstance of job loss.
Forbes wrote about certain ways you can deal with layoffs. To reiterate, the piece says you should acknowledge how you feel and take time to accept those feelings. You should also not take it personally, as there are many other people just like you, who have been laid off in their lives.
In addition to getting your perspective in line, you need to take hold of your budget as soon as possible. You might now limited to a certain amount of money, perhaps without the chance to bring in funds for a little while.
Fortunately, there are several ways you can address your needs without having to constrict yourself. Here are three ways you can keep yourself afloat financially while looking for your next career opportunity.
Cut Off Unnecessary Services
The first thing you can do to ease the burden on your personal finances is to eliminate any non-essential paid services in your life. It may have been understandable to subscribe to these things before, when you had a steady stream of income. Considering your circumstances now, the best thing to do is make a list of which expenses are the “must-haves” and which are the “it-would-be-nice-to-haves.” In times like this, it makes sense to take away the wants and focus on the needs.
Say for example, if you’re subscribed to an expensive cable package, it may be good to take a close look at the service to determine whether it’s worth it or just another unnecessary bill you have to pay. Although it may provide you a great viewing experience, it may just be a luxury you can’t afford.
Another case is determining whether you should cut off your internet service. While cutting this can provide you with more workable funds, it is important that you assess the benefits of having internet access in your home. This is usually a harder choice to make than cutting cable. But, if you feel it’s necessary to stay afloat, there are clever ways to use internet without having to pay.
Libraries are sometimes a forgotten resource, but your local library offers free internet service. Most of the time, all you need is a valid library card, so why not cancel your home Internet service and use the public library’s for free? Don’t miss out on the opportunity to search for jobs online just because you don’t have internet at home.
Overall, the best suggestion from most budgeters is that you should always go to the basic needs. You need a reliable phone for potential employers to call you, but you have likely been paying for services you don’t need. Take a look at your phone bill and see if you can cut any services or make a habit of cutting back your data usage.
Review Your Spending Habits
Remember that you are now in a position where you can only spend a relatively small amount compared to your usual habits. This is why it is important that you are taking a look at how you’re spending your money, as well as reviewing what things you do and don’t need to buy.
The way to review your spending habits is first to figure out where your money comes from and where it goes. Next, look for areas where you can trim expenses and save money. Doing so can help you determine what your temporary budget might be.
Finally, use this information to re-evaluate your financial situation, and see what changes you need to make.
Make essential items such as rent, food, and transportation your first priority and identify which of your luxury and “nice-to-have” items you can cut back on until you regain employment. For example, if you’re used to buying that Starbucks Coffee every morning, you might consider opting for a cheaper alternative. Again, you are working under a strict budget and your usual habits will not work for you.
It can be tempting to be a bit reckless with your spending when you first lose your job. You think you can get another job right away. Maybe the stress is beginning to take it’s toll, or you’re bored or depressed. You might just want to spend money to entertain yourself or to make yourself feel better. Don’t fall into those traps. You have no idea how long you could be out of work or how much money you will be making once you do find work again.
Another thing you should do as soon as possible is call your mortgage and credit card companies. Explain your situation and ask for a modified payment plan that would not impact your credit rating. If you have student loans, contact your lenders. You are probably eligible for a period of forbearance during which your payments may be suspended entirely with no effect on your credit score.
Keep in mind that you will be paying your balances more slowly and, therefore, increasing the amount of time and overall cost of paying off your debt. Once you land a new job, be sure to set these payment plans to what they were before.
Retain Your Health Insurance
This may seem to be up for debate, but keeping your health insurance can actually benefit you in the long run, even if it hurts financially at the moment. You may argue that this is just another bill to pay and doing so would lessen your resources to work with. However, paying for health insurance ensures that you are covered in case that you get fall ill or get injured and cannot not be financially productive.
The bigger question now is how you can actually get a health insurance plan when you are unemployed.
According to HealthCare.Gov, it is possible to still get the benefits of a health insurance when you’re laid off. If you’re unemployed, you may be able to get an affordable health insurance plan through the marketplace, with savings based on your income and household size. You may also qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP).
Your household size and income, not your employment status, determines what health coverage you’re eligible for and how much help you can get through insurance. When you fill out a marketplace application, you find out if you qualify for any available insurance plans. You may qualify for premium tax credits and savings on deductibles, co-payments, and other out-of-pocket costs based on your household size and income. Some people with low incomes may end up paying very small premiums.
You can also take advantage of Medicaid. Medicaid provides coverage to millions of Americans with limited incomes or disabilities. Many states have expanded Medicaid to cover all people below certain income levels.
Susan Ranford is a blogger interested in business, personal finance, the U.S. job market, and anything data-driven. When she’s not digging through the internet, you can find her reading, hiking, or playing with her dog.