How to Stabilize Your Finances After a Job Loss
If you just lost your job, please accept our condolences. It’s one of life’s crummiest situations, and universally so–in fact, job loss consistently ranks in the top 5 most stressful life events, and for good reason. Not only does it upend our professional trajectory, but it hurts our pride and most crucially, our bank accounts.
Fortunately, losing a job isn’t the end of the world. Take a deep breath; nobody died, and there are steps you can take to stabilize your life and your finances after this deeply upsetting event. Here are just a few of the steps you can take to help make life a little bit easier for yourself after an unexpected job loss:
- Understand–and file for–unemployment benefits
One of the very first things you should do if you’re laid off or furloughed is to apply for unemployment benefits in your state. When you are working, your taxes are taken out to fund programs like these, so there’s no shame in taking advantage of them when you’re in a situation to do so, as this extra income can be a genuine lifesaver during a time of crisis.
There is an urgency to this, however–your first unemployment check can often take weeks to arrive, and if you don’t have much of a savings cushion or emergency fund, that can be a tough gap to bridge. Fortunately, after the 2020 CARES act was passed during the COVID pandemic, many states have made it easier to go online (find your state’s info through the Department of Labor website) and apply, so don’t delay any longer if you haven’t already.
- Redo (or do) your budget
Your income has changed, and we’re not going to sugar-coat it: that means your budget has to change too. After you’ve filed for unemployment benefits, one of your first orders of business should be to pull up your budget and amend it to reflect your new income (or lack thereof). Identify your “must pays,” calculate how far you can stretch your savings, and start rebuilding your budget to help you survive for at least a few months while you job search.
And if you were in a position where you didn’t have to worry about a formal budget? Well, there’s no better time to start making one than now–you’ll almost certainly need it, and once you’re back on your feet, you’ll find that having your finances all calculated in front of you each month will give you the information and freedom to make truly smart financial decisions going forward!
- Cut unnecessary expenses
Even if you do have savings and are eligible for unemployment assistance, you likely won’t feel comfortable spending at the same rate you did when you were bringing in a full-time income. An easy way to help every dollar stretch a bit further is to identify and cut out unnecessary spending in your day-to-day life.
It’s easy to joke about how cutting your Starbucks order out of your daily routine won’t help you save up the down payment on a house, but those extra couple of bucks a day can help you stop the bleeding when all your savings are going towards keeping your mortgage paid, the power on, and gas in the tank. But more than just coffee, consider expanding your definition of “necessary” spending–look to see if you can cut out subscription services you don’t need, using your car less for short trips or those you can reach by bus or bike, and other creative options for saving a few bucks each day.
- Reach out to your lenders
When you’re in between jobs, bills piling up can be truly overwhelming, and it can feel like there’s no relief. But believe it or not, the faceless organizations in charge of your apartment rental, mortgage, power bill, credit cards, and more can lend a hand when you’re going through it. If you call your lenders or creditors and explain the situation, you’ll find many are happy to offer payment plans, deadline flexibility, or late fee relief.
It is important to note, however, that these plans often only reveal themselves if you take the first step–financial organizations love to make money off of piling up debt and if they start chasing you down, they’re unlikely to show much sympathy. But by being proactive and reaching out, they’re much more likely to work with you as a partner than treating you like a criminal (which is a sure-fire way to make you feel even more helpless).
- Pick up a side hustle
The gig economy has its downsides, for sure–contract or self-employment can be notoriously precarious and offer little in the way of security when things go wrong. But it’s not all bad; the flexibility inherent in these side gigs make them easy to pick up and fill in the gaps when you’re out of a full-time job, and the extra money they can help you bring in can make all the difference in the world.
Some of these gigs may not be the most fun (let’s admit it, most people aren’t delivering through Door Dash because it’s their life dream), but they can help pay the bills. But every storm cloud has a silver lining, and with the right entrepreneurial spirit, this can be your opportunity to turn a fun hobby into a genuine source of income–who knows; maybe this could be the start of something big!
Spotloan: A Smarter Way to Borrow
Losing a job can feel like the world is ending, and the sudden income and lifestyle changes can be jarring and difficult, especially if you don’t have the savings to bring you through this difficult period. And if that’s you, we understand if you need some help. At Spotloan, our simple online application process can help you qualify for the money you need, even if you have bad credit or need a loan quickly. All you have to do is go fill out our application to see if you qualify, and you could receive a decision within minutes. Fill out our application now!
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