Losing your job is a scary prospect, especially if you’re single, or the sole breadwinner in your family. This year has seen a lot of changes, from sudden lockdowns across the world to many jobs and even industries being lost. If you’re facing the loss of your job, then you’re going to want to secure your finances as quickly as possible so you can navigate the coming weeks or months before you have another regular income source, confirm the experts at DebtBusters.com. Here are my tips for how to secure your finances after losing your job:
1. Tally up Your Expenses Versus Any Savings
The first thing you need to do if you’ve found out you have lost your job is getting hold on what your essential expenses are. Things such as living expenses, any mortgage or debt repayments, basic amounts for food and transport and so forth. Knowing the cost of your essentials will allow you to figure out exactly how much you need each week or month. In our normal lives we hopefully have a bit of financial cushion for small luxuries such as eating out here and there, fancier food, drinks out with friends or entertainment. If you’ve lost your job, you’re going to want to put all these activities and treats on hold until you’ve established a new income source. Figuring out exactly how much you need each week or month will allow you to do an important calculation: with how much money you have in the form of savings, any remaining work payouts etc, how long can you continue to cover your expenses? Is it just one month, or many months? This will allow you to understand how long you can afford to hunt for a new job and how much financial security you have in the near future.
2. Consider a Personal Loan
A personal loan is usually something I suggest for big purchases, like a car or even for helping to reorganise finances that you’re paying at a higher interest rate, such as preexisting credit card debt. Getting a personal loan can be a great way to move forward financially in your life, but it can also be a saving grace in a time of financial crisis. If you’ve just found out you’ve lost your job and don’t have much in terms of savings, it might be a good idea to apply for a personal loans online so that you can cover your next few months’ expenses while you find a replacement job. This can help you keep on top of all your immediate expenses so you don’t have to worry about potentially losing your home or not having food on the table.
3. Get Job Hunting
The longer you’re out of work, the less stable your finances will be. Getting back on the horse is the best thing you can do for your financial stability. Due to the pandemic and a potential upcoming recession, you may have to be open to working in a different industry for slightly less money. The main thing is to get a regular income as soon as you can, and your goal should be earning more than your basic expenses that you calculated above. Opening up the industries you’re prepared to work in will allow you to have more options and hopefully get you financially secure quickly. While personal loans can help you stay afloat in the meantime, they’re not a good long term strategy! It can also be a good time to ask friends and family if they have any leads, as often a personal recommendation helps you get your foot in the door.
4. Apply for Government Assistance
Depending on where you are, you may be eligible for some government assistance to help you or your business weather the next few months. It’s probably not going to be a long term solution, but can be a great way to help you deal with the short term while you find your feet again. Of course, what you’re eligible for will depend largely on where you are and when you apply. It can be a good idea to make an appointment with the local financial support agencies that you may have, so that you can see what options are available. It can be hard to consider applying for financial aid, especially if you’ve been financially independent your life. But these are unprecedented times in our lifetime and there’s no use in letting pride get in the way of your living expenses.
5. Consider Some Refinancing
As we mentioned above, one of the most important things to do if you’ve lost your job or things are not stable is to figure out your basic monthly expenses. Once you have them written down, then it may be time to see how you can reduce your payments. There are a few options for this, one of the ways you can do this dramatically is by refinancing your home loan. You may want to consider extending the length of the term temporarily while you find a replacement job and build up your finances. The longer the loan, the more you’ll pay in terms of interest. However this may be worthwhile to do for a while to stabilise your finances. Another option is that you can take out a personal loan in order to consolidate debt, and have the debt with a smaller interest rate. Personal finance loan interest rates tend to be substantially lower than credit card interest rates, so this can be a great option for reducing your monthly repayments while keeping the terms the same. The challenging thing about a job loss is that you don’t know exactly how long you’ll be out of work, so it’s a good idea to have a few options of things you can do depending on the length of the unemployment.
This year has thrown many of us a number of curveballs, hopefully these tips for how to secure your finances when dealing with job loss help you find a clear path forward.