Losing a job is never easy, but there are steps you can take to help lessen the blow of being laid off. Strategies such as applying for unemployment immediately and making changes to your budget can help you weather the storm until you land on your financial feet again.
Financial strategies to help if you lose your job
1. Apply for unemployment immediately
If you lose your job, make sure to apply for unemployment right away. Even if you’ve received a severance package, you should apply ASAP to get the filing process started. The criteria for qualifying varies from state to state, but in general, you will need to have worked sometime in the past 12-18 months and have been let go or moved down to part-time hours.
2. Find new healthcare solution
The next step on your list should be finding a new healthcare provider. Depending on your situation, you may qualify for your parents’ plan (if you’re under 26), Medicaid, your spouse’s plan, or a plan through the Affordable Care Act. Make sure to carefully review the paperwork you receive after you lose your job to see if there are any suggested healthcare options you can take advantage of.
3. Assess your finances
Sit down and take time to honestly assess your finances. Note the amount of money you have coming in each month and your total expenses, as well as the due dates of your bills. Once you have an idea of your overall financial picture, you’ll be able to reexamine your budget.
4. Tweak your budget
You’ll likely need to make some changes to your budget and reconsider your spending choices. See what’s essential and what isn’t. For example, your rent is a necessity but your Netflix account probably isn’t. Making small changes throughout your budget can help you save big each month.
5. Speak to creditors
You can reach out to your creditors regarding potential relief options. Make sure to read the fine print of what they’re offering. For example, it’s important to know if interest still accrues on any payments that get deferred. Take a look at your bills and see where you can get flexible payment terms.
6. Look at other forms of financial aid
You can check out other ways to receive a financial boost, such as using a credit card with an introductory 0% APR period or receiving a personal loan. Just make sure that you have a plan in place to repay any debt you accrue on time.
Ways to consolidate debt with bad credit
If you have a fair or poor credit score, you may want to look into how to consolidate debt with bad credit to help you if you lose your job. If you’re a homeowner, you could look into a home equity loan, a home equity line of credit (HELOC), or a cash-out refinance. If you don’t own a home, you may want to consider a debt management plan (DMP). Debt settlement and bankruptcy are options you should only consider as a last resort.