If you are laid off from a job and have to make ends meet, every financial decision that you make will be extremely crucial and important. This is not the time to make a decision in haste. You need to maintain a particularly positive outlook until you get your next job. Proper management of finances becomes tough when you don’t have a job. This is indeed a very tough situation when you might find yourself in a very helpless position. However, don’t worry, money management is tricky when you are jobless but not impossible.
Remember, budgeting after job loss can help you to manage your daily expenses. However, you should know the proper ways to formulate a budget to manage your finances in this hard time.
Here you go:
Tips to formulate a budget when you are jobless
Budgeting after job loss is difficult but important. If designed correctly, budgeting can help you get rid of the stress of your financial life. If you have adequate funds in your pocket, you would not have to be concerned about how to pay off your bills. With a proper budget in place, you have answers to these questions. Even when you don’t have a steady income, a budget can help you to manage living costs properly. A budget can help you pinpoint where to cut back your expenses. It also helps you to manage your monthly bills.
Here’s how you can consider budgeting after a job loss to manage your money.
First, download the budget worksheet. You can also take a printout of the spreadsheet.
List down all your income. When you are jobless, your income is your existing savings. In this step, you need to list down all your expenses including your monthly bills like rent, mortgage payment, property taxes, electricity bills, medical costs, and all other expenses that you incur on a regular basis. If the allocated amount for your monthly budget is negative, you need to think of ways to reduce your expenses.
In this way, by keeping a proper and realistic budget in place, you can manage your finances being a jobless person.
Below are some tips you should follow when you are laid off and have to create a budget:
Make a plan
Job loss is overwhelming, but you should stay calm so that you can make a solid plan for the crisis period. Talk to your family members regarding this crisis and seek their help. Request them to support you during this period.
Cut down unnecessary expenses
Before formulating a budget, you have to eradicate all the unnecessary expenses so that you can manage basic expenses within your small budget. You should budget your funds to buy daily necessities like groceries, food items, and necessary medicine. You need to stick to the budget strictly so that you can sustain your family as well as manage your debts (If any).
Prioritize your bills
When you don’t have a job, you need to prioritize your bills and decide which one to pay first. This is something that will always help you manage your finances. Start paying off with the most important bill. It is suggested that you pay for food and medical expenses first followed by the mortgage bills and then the car/gas bills.
Avoid expensive buys
When you do not have a job, it would be completely unwise to go for impulsive buys. You need to understand that your financial situation would not allow you to go for exorbitant buys. You should also request your family members not to buy expensive things during this crisis period.
Ask for a severance package
In case you have been laid off, you need to make a sincere effort to negotiate a particular severance package with your employer before you officially leave your workplace. No matter how small the severance package is, it would be beneficial for your financial needs.
Finally, try to get a job. You can even do a part-time job when you have been laid off. The job might not be as good as the one that you had but at least some money inflow would always help you manage your finances. It’s better to have a small amount than not having anything at all. Remember, a budget would be your best friend when you have no job. To manage all the mandatory costs, you have to create a shoestring budget. If you experience difficulties in creating a budget after a job loss, seek help from a financial advisor. Professional advice can help you to manage finances in a better way. In this way, you can also get back an optimistic attitude to life.