A job loss is extremely frustrating on many levels, as it has the potential to cause financial stress. While there's no simple way to deal with a period of unemployment, there are steps you can take to better manage your finances.
Upon losing your job, turn your immediate attention to any financial changes you can make for the better. Here are five things you can do to better manage your finances during a time of unemployment:
- Review everything: From the money you have in the bank to your monthly obligations, review everything with the idea of making some changes for the better. For example, this review may help you pinpoint expenses you can cut out of your life until you land another job.
- Create a budget: With money tight, you need a budget to guide you. Start by understanding how much money you have to make ends meet for the time being. From there, consider all sources of income, such as unemployment payments, along with your monthly bills.
- Make a list of your wants and needs: There are things you need in life, such as food and shelter, along with things you want. It's critical to first address your needs, and then move onto any wants that make sense.
- Don't add more debt: When money is tight, it's easy to get into the habit of relying on credit cards and other forms of loans. This may provide some relief upfront, but it will work against you in the long run.
- Don't dip into your retirement accounts: Unless this is your last resort, you should avoid it at all costs. It sounds like a good idea while unemployed, but it will come back to harm you when you finally want to retire.
With this advice guiding you, it's easier to understand and manage your finances during a time of unemployment.
If you're swimming in debt and concerned about your financial future, it may be time to learn more about bankruptcy.
Chapter 7 bankruptcy, for example, allows you to discharge some of your debts, thus making it easier to get by while unemployed.
Visit our website and read our blog for more information on the many types of bankruptcy and how to get started.