The finances of job loss Job loss impacts every aspect of your life—personal, professional, and certainly financial. Bringing in less money than you are accustomed to—even by just a few paychecks—has the potential to create a ripple effect on your monthly budget and expenses. When faced with a career crossroad and a loss of income, it is tempting to make hasty short-term monetary decisions that have the potential to negatively impact your longer-term financial security. Don’t neglect day-to-day money matters Finding a new job is most likely your top priority, but effectively managing your finances during your career transition will help ensure that money matters remain sound for you and your family. Consider some of these tips to help lessen the temporary financial strain associated with job loss, and create some peace of mind.
n Reduce spending. With one of your family’s income sources absent, it is important to accept the fact that until it is replaced, you can’t afford to spend as much as you once did. Gain family consensus on essential expenses, like food, housing, and household bills, and the more discretionary items that you can temporarily forego. Eliminating some unnecessary spending will give you some financial breathing room while you search for a new job. n Rework your budget. Once you have trimmed your expenses, you will need to rework your budget to ensure that the items you must continue to spend money on are covered. Calculate your available funds—including emergency money, savings, unemployment benefits, and any severance pay—and determine how long they will last. n Pay bills on time. In order to keep your expenses from growing out of control and protect your credit rating, it is important that you continue to pay your bills on time. Consumer credit advocates recommend prioritizing living expenses, followed by secured
credit accounts, and then credit cards. Strive to pay at least the minimum amount due for as long as you can. If making payments become too challenging, contact your creditors to potentially negotiate new payments. n Limit credit card use. To help manage expenses and avoid overextending yourself, limit your credit card use to emergencies only. Avoid transferring balances between credit cards because after a brief, lower introductory rate, balance transfers often carry higher long- term interest rates. Stay focused on your financial future Being in between jobs may feel like an endless journey. But rest assured, this transitional phase will come to an end. So, it is important to not lose sight of your long-term financial goals. The following suggestions can help you to stay focused.
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