This is a tough topic, Money Bitches. Losing your job can be a devastating experience. It can leave you feeling uncertain and anxious about the future. But if you take the right steps, it doesn’t have to mean financial disaster. Here are 5 tips to take care of your money if you lose your job.
1. Start job searching.
When you lose your job, one of the most important things to do is start job searching. This can be a daunting task, but there are strategies you can use to make it easier. The first step is to update your resume and cover letter. Make sure they accurately reflect your skills and experience and include any recent projects or accomplishments. If you’re struggling, look for an organization that offers resume writing assistance. You should also create an elevator pitch, a one-minute summary of who you are and why you would be a great fit for the position.
Another helpful step when job searching is to research potential employers. Learn about the company culture and read up on their mission statement and values so that you can tailor your application to fit their needs. It’s also important to build up your professional network by connecting with people in your field on LinkedIn or other social media sites. Doing this will give you valuable insight into potential job opportunities and help increase your visibility among employers.
Once you begin applying, it’s important to remain organized throughout the process. Keep track of which jobs you’ve applied for so that you don’t accidentally submit the same resume twice, which could hurt your chances of being hired. You should also follow up with each employer at least once a week asking if they have any updates on their hiring process or if they have any additional questions for you.
Finally, don’t forget to take care of yourself while looking for work as well! Set aside time each day for exercise, relaxation activities like yoga or meditation, and brainstorming creative ways to market yourself such as creating a personal website or blog featuring your skillset and relevant success stories from past positions held. Taking care of these basics will help keep stress levels low while giving yourself the best chance possible for finding gainful employment in today’s difficult economy.
2. Make sure to file for unemployment as soon as possible after you lose your job.
Filing for unemployment is an important step to take if you have lost your job. It provides a way to receive some financial relief while you look for other employment. To file, you will need to collect certain information, such as your Social Security number and the name and address of your last employer. You must also provide proof that you are unemployed, such as a letter from your former employer stating why their services were no longer needed.
Once the application is filed, it generally takes 4-6 weeks for the state agency to decide on eligibility and begin payment of benefits. The amount of money received each week depends on several factors including the income earned during your base period—the first four out of the last five completed calendar quarters prior to when you became unemployed—and the state’s weekly benefit amount.
Furthermore, there are now additional benefits available due to COVID-19. These could include receiving Pandemic Unemployment Assistance (PUA) or having up to $600 per week added to regular unemployment insurance benefits (FPUC). Those who qualify can also receive an extra 13 weeks of unemployment through the Extended Benefits program (EB).
It is also important to note that once approved for unemployment, individuals must continuously document their job search efforts to remain eligible for benefits. This includes actively searching for work and keeping records of all job searches performed, such as applications submitted and contact with employers or employment resources. Finally, individuals must certify their eligibility status every two weeks via phone or online for payments to continue.
Losing one’s job can be a difficult experience financially and emotionally; filing for unemployment can help ease some of those burdens during this time by providing financial support until another source of income is found.
3. Take steps to cut costs as soon as possible.
When you lose your job, it is essential to take steps to cut costs as soon as possible to preserve cash flow and prevent going into debt. This is not only important for covering immediate needs such as rent or mortgage payments, utilities, and food, but also to ensure there are funds available for unexpected expenses down the line.
One way to start cutting costs is to review monthly expenses such as cable, streaming services, cell phone plans, gym memberships, and other subscription-based services that you no longer may need or be able to afford. You may even be able to negotiate a lower rate with certain companies if you’re facing financial hardship. Additionally, look at areas where you can reduce overall spending by finding more cost-effective alternatives—such as buying generic brands instead of name brands at the grocery store or switching from in-person shopping to online—and consider ways to supplement this money like taking on temporary gigs or selling unused items online.
If necessary, reach out for help from family and friends in order to cover basic expenses like rent/mortgage payments and utilities while unemployed. Additionally, many non-profit organizations offer assistance programs that provide financial aid or discounts on basic necessities such as food and housing. There are also government programs designed specifically for those who have lost their jobs due to COVID-19 that can help make ends meet during this time. Many states have launched unemployment assistance programs which provide additional benefits through the Pandemic Unemployment Assistance (PUA) program or supplemental payments of up $600 per week through the Federal Pandemic Unemployment Compensation (FPUC) program. Furthermore, individuals may qualify for an extra 13 weeks of unemployment insurance through the Extended Benefits (EB) program if they have exhausted their regular benefits period within a state’s jurisdiction.
Finally, it is important to create a spend plan and closely track your spending to avoid any unnecessary expenditures that could further strain your finances when unemployed. Make sure all necessary bills are paid first before spending any additional money on frivolous items; if need be prioritize spending based on importance so that you don’t run into debt during this financially challenging time.
4. Consider utilizing any savings or investments that you currently have to help cover expenses while you search for a new job.
When considering utilizing savings or investments to help cover expenses during unemployment, it is important to remember that these funds should be used only as a last resort; if at all possible, individuals should make every effort to find another source of income quickly in order to avoid depleting their savings. If your budget is already tight and you don’t have any extra room for cutting costs, then your investments may be able to provide some additional support.
If you are fortunate enough to have access to 401(k)s, Individual Retirement Accounts (IRAs), college savings accounts, certificates of deposit (CDs), and other investments, there are several strategies you can use to free up some funds while unemployed. For example, if you have a 401(k) or IRA retirement account, you may be eligible to take out a loan against the balance in order to cover living expenses while searching for work. However, it is important to keep in mind that if the loan is not repaid within the specified time frame (usually 5 years), then it will be treated as an early withdrawal resulting in taxes and penalties on the amount borrowed.
Another option for freeing up funds from existing investments is by taking an emergency distribution from an IRA or 401(k). While this strategy will also result in taxes and penalties unlike a loan, it may still be beneficial depending on the individual’s current financial situation. Furthermore, those under 59 ½ years old can qualify for a “hardship” exemption which would allow them to avoid both federal income tax on the distribution and 10% early withdrawal penalty from their retirement funds.
For individuals with more liquid assets such as certificates of deposit (CDs), these can usually be broken without incurring any penalties as long as they’ve been opened for at least six months; however it is important to note that this strategy could potentially expose your money to inflation risks over time due to low interest rates associated with CDs. Lastly, those with 529 plans designed for college savings may also qualify for hardship withdrawals when faced with certain financial difficulties such as job loss but may still face certain state-level taxes depending on where the plan was set up.
Utilizing existing investments or savings can help ease some of the financial burdens associated with unemployment while searching for a new job; however, it is important that individuals proceed cautiously with caution and research all options thoroughly before deciding which course of action is right for them so that they don’t further strain their finances during this difficult time.
5. Seek out additional sources of income while looking for a new job if needed.
Temporary gigs such as freelancing or tutoring may help bring in some extra cash until a more permanent position is found again; also consider how else your skills might be valuable, such as creating digital products or consulting services for others in need of assistance with their own businesses or projects related to yours. Other passive income streams such as dividend stocks or rental properties can also generate funds over time without requiring too much effort on your part once they are set up properly; however, keep in mind that these methods generally require significant capital up front before they become profitable investments and should only be investigated if other options cannot meet immediate needs first.
Need help navigating a job loss?
We can help! To help guide your money mindset during this difficult time, book a free discovery call. If you need in-depth help with financial planning, visit our sister company, Wilcox Financial.
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