Job layoffs are increasing all across the country. They are becoming a common occurrence. Unfortunately, this may mean you are soon impacted, if you haven’t been already. If your household was previously a two-income family, you are in a unique position. Yes, you will need to cut expenses. You will get unemployment and possibly a severance package; however, these do not last forever and their amounts are smaller than your last paycheck. It is less money than you are used to having. So, how can you make the adjustment and survive a layoff when transitioning from a two-income household down to one?
Most importantly, do not panic. Your husband or wife has income coming in too. This may not be what you wanted to hear, but consider yourself lucky. Many families have one parent staying home with the kids. They are now reduced to no steady income. A single person is now left to, literally, fend for themselves. Once again, you need to make a few changes, but that one remaining income should keep food on the table and pay necessary bills. As stressful and depressing as getting laid off is, remember you will receive unemployment for a time and you have an additional income to fallback on.
Determine how much money you have available to spend each month. Even with unemployment, your weekly checks will be less than before. Determine how much less. Take your husband or wife’s income and add it to your weekly unemployment benefits. How much money does your family have each month? This is important. You cannot live within your means if you don’t know what those means are. Luckily, this step is easy and should take you no more than 15 minutes.
Reduce your expenses. You now know your monthly income. This is how much money you have to survive each month. In terms of reducing expenses, take everything you don’t need to survive, like television, internet, or a morning cup of coffee at Starbucks. Unless on a very tight budget, you don’t need to go without. First, try cutting back. Look at your phone package. How many long distance calls do you make each month? If just one or two, eliminate long-distance and use your cell phone to make those calls. In fact, can your cell phone replace your landline phone? Do the same with internet and television. Look for cheaper alternatives.
Reduce the cost of food. This could easily fall into the category of cutting expenses, but there are so many money saving tips it deserves it own section. To get started, make sure you are shopping at the right stores. Take an afternoon to look at nearby stores; browse their products and prices. The grocery store you shopped at for years may not have the best prices in town. Cut your shopping down to once or twice a week to avoid impulse purchases. Most importantly, use coupons. They appear in most Saturday and Sunday newspapers. You can also use online coupon websites. Perform a standard internet search to find product websites and look for coupons posted.
If you are a parent, you likely had children in daycare. Whether it was all daycare or before and after school only, pull them out. Most daycare contracts have special exceptions for termination of service with job loss. Depending on where you live, this could save anywhere from $100 to $300 a week! When you start looking for a new job, find a part-time babysitter or rely on friends and family to watch your kids while you attend job interviews.
Only use your savings in the event of an emergency. As shown above, there are many ways that you can survive a layoff when still having another full-time, working income to rely on. Start implementing these steps the moment you are laid off from work. One mistake many unemployed workers make is spending their savings right away. If you saved money over the years, you may have anywhere from $2,000 to $20,000 stashed away. Yes, a layoff is considered an emergency, but with the poor job market, there are no guarantees when you will find a new job. Don’t deplete your savings when there are other alternatives.