If you find yourself one of the millions of Americans without a job due to a layoff, you may start to worry about your finances. Even if you collect unemployment benefits and are lucky enough to get a severance package, they don’t come close to what you were making before. Most importantly, they will not last forever. So, how can you ensure you stay afloat financially when laid off from work?
The single most important thing to know and always remember is the phrase “live within your means.” First, you must know what they are. Take your weekly unemployment check and add any additional income, like from a working spouse. Times that by four. This total is what you must live from each month. Since you are making less, you need to spend less. Continue reading on for a few good ideas.
If you had health insurance through your job, do not fret right away. You have the option to extend your coverage through COBRA. Unfortunately, it can be very expensive. Check your options first. Would it be cheaper to get COBRA or purchase insurance directly through a provider? If you are married, can you get health insurance coverage through your spouse? Also, check with your state. Since you are making much less, you may qualify for government sponsered programs, such as Medicaid or Health Plus.
Reduce your use and the cost of paid services. Paid services include everything from house cleaning to childcare to getting your nails done twice a month. Yes, you may get an affordable rate, but that rate will significantly add up overtime. If you do not anticipate finding a job in a month or two, discontinue childcare. Watch your kids and rely on friends and family to help you for job interviews and errands. Other moneysaving tips for paid services include mowing your own lawn, doing your own nails, and having a friend cut or highlight your hair.
Do not rely on credit cards to survive. This will not only save you money in the long-run, but also help you avoid debt. Now is the time to cut up multiple credit cards. It is just too risky to have them. One credit card is good for emergencies, but know how to use it properly.
Lower the cost of your car. Start with the car itself. Is it paid off? If so, you are good. If not, can you afford the monthly payments? If not, now is the time to consider selling and buying a cheaper used vehicle. Don’t wait until your vehicle is about to be repossessed due to non-payment. Then, focus on car insurance. If you have a good driving record, call around to get a cheaper rate.
Reduce the cost of necessary utilities. For the heat, turn it down a few degrees in the winter. In the summer, be cautious with air conditioning. Keep your air conditioner turned on at a reasonable temperature, run only when needed, and use fans too. For water, work on shortening the length of your showers, do not leave the water running when doing dishes, and only run the dishwasher when full. As for electricity, keep all lights, the television, and computer shut off when they aren’t in use. Also, look for a cheaper phone, internet, and television package.
The above mentioned steps are just a few you can take to avoid debt after a job layoff. Your goal is to live within your means. That involves cutting costs. Spend less and do not rely on credit cards; you should survive this financial complication unscathed.