Losing a job can make for an extremely stressful time both financially and emotionally. There are two ways to look at the situation, one is as a defeat and the other is as an opportunity. When you look at this loss as an opportunity, it can help you stay motivated and moving forward to bigger and better things. This challenging time is a chance to exercise the following smart money moves.
Review and Adjust Current Finances
It may have been a while since you checked your finances and how you have been allocating your money to the various facets of life. When you lose your job, you will need to take a look at what you’re currently spending money on and make adjustments that will utilize your money wisely. Figure out your hard costs, like the mortgage and monthly car insurance, and then separate them from your soft costs such as family dinners out and entertainment. Make a plan based on the money you have to work with and adjust it to your new situation so that it stretches your dollar as far as possible until you get back on your feet.
File for Unemployment
As soon as you lose your job, apply for unemployment benefits immediately. It can take a while for your application to be processed and even longer for you to actually receive unemployment benefits. By making the smart move to file as soon as possible, you can avoid extra financial burden caused by the gap between your last paycheck and the unemployment check.
Cut Down on Unnecessary Spending
This is the time when you need to watch your spending. Cut down on unnecessary spending on items you don’t need and luxuries that can wait for when you start working again. This includes vacations, dining out, shopping for gadgets and buying higher end groceries when the basics work just fine.
Take an Online Budgeting Course
You have access to so many resources that can help you stay afloat after losing a job. Take a free online budgeting course for guidance on how to handle your new financial situation. Ones like Budget 911 on credit.org are particularly relevant for those who are facing an emergency or unexpected financial change. It can teach you how to live a more wallet-friendly lifestyle that you and your whole family can benefit from.
Figure Out Your 401k Future
When you lose a job, you are no longer able to contribute to your 401k through your company. You can either cash out money with early withdrawal penalties or rollover your 401k to an individual investment brokerage like Fidelity. If you can make ends meet without having to dip into your 401k, do so. That way you’ll still have your current savings intact for your future retirement or when you have a more serious financial burden that needs to be taken care of.
Pick Up a Part-time Gig
If you decide not to collect unemployment, you can alternatively pick up a part-time job to make money while you look for full-time employment. There are many different types of jobs out there that you can immediately start to do. For example, you can drive for a ridesharing company like Lyft. Lyft drivers make up to $35 per hour and you get to choose your own hours to drive. Additionally, the company also provides various benefits including medical insurance—which could come very handy since you’ll need to get a new health insurance plan after losing a job. Amway is also a smart company to work for when looking for flexibility and extra cash. You are your own boss when you join the Amway network. The company provides a platform and tools to help you sell products, and you collect a margin of the sales.
Losing a job causes financial hardship no one wants to deal with. These smart money moves will help you manage the current assets you do have and build upon them, so you and the family can stay afloat until you find a new job opportunity.