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Losing your job is a scary time and if you don’t deal with it right, you could find yourself in a very difficult position. It’s important that you keep your motivation up and treat your job search like work so you can start earning again as soon as possible.
You also need to keep an eye on your mental well-being during a period of unemployment because things can easily get on top of you. While those things are important, the first thing you have to do is sort out your finances.
You don’t know when your next paycheck is coming so you need to start working out how you’re going to survive until you find another job. Here are some handy tips on planning your finances when you’re unemployed.
Get Any Money You’re Entitled To
When you’re not earning, you’ll need as much money as you can get your hands on, which means getting any that you’re entitled to. For example, if you left work due to an accident and you think that your employer was at fault, you should visit SeveyDonahueTalcott.com and see if you can make a compensation claim.
That extra money will really help you out until you find a job. It’s also important that you negotiate your redundancy package and don’t just take the first offer they give you. Your boss will usually go higher so you should push for as much as you can get, it’ll make all of the difference until you start earning again.
Work Out What You’ve Got
Knowing what money you’ve got coming in is the first step to planning your finances. That means adding up all of your household income. That includes any interest you’re making on savings, your partner’s income and any benefits you’re entitled to.
If you’ve got an emergency fund, you shouldn’t include that. If you start spending it all, that defeats the purpose of having an emergency fund in the first place. Once you’ve worked out exactly how much money you’ve got to work with, you can start to get an idea of how long you can survive before running out of cash completely.
Negotiate Mortgage Payments
Not a lot of people realize that you can negotiate your mortgage repayments to make things a little more manageable. If you go to your mortgage provider and explain that you’ve lost your job and you’re struggling with your repayments, you can set up a new payment plan with reduced monthly contributions. This can be a massive help in making your outgoings more manageable. Once you find a new job and start earning again you can increase the payments to their normal level.
Stop Payments Into Savings
Regular payments into a savings account is one of the cornerstones of sensible money management, but in this case, you should stop. Your first priority right now is making sure that you’re covering all of your bills and you’re not getting into debt. If paying into your savings accounts makes that harder, you should stop until you’re working again.
It’s vital that you follow these steps and organize your finances right away when you lose your job, otherwise, you’ll end up in a lot of debt.