Now that the economy is back on firm ground and the long-term employment numbers appear relatively strong, a person could be forgiven for thinking that their job is largely safe. The unfortunate reality, however, is that things can still happen behind the scenes that force employers to make tough decisions, including terminating part of their workforce.
As understandably distressing as this scenario can be, it’s important for people who are now out of a job not to start panicking about how they will make ends meet, as there are many things they can do to stay afloat while they search for that next great job opportunity.
Indeed, experts have identified just a few simple — yet highly effective — steps that the newly unemployed can take to help ensure that they remain current on their financial obligations.
Revisit your budget
While you might prefer not to think about it, if there’s any chance you could go a few weeks or even a few months without a paycheck, it may be time to revisit your budget and identify what you can really afford to go without for the foreseeable future from subscriptions to eating out.
Revisit your debt payment strategy
If you have recently embarked on a plan to attack your outstanding debt — paring down student loans or credit cards — you are to be commended for your gumption. However, experts indicate that you may want to temporarily halt these plans if you’ve recently lost your job, as you will need to make every penny count. Indeed, they indicate that more attention should be paid to making the minimum payments on your secured debts like your auto loan and mortgage.
Proceed cautiously with credit
While the idea of simply putting everything on credit cards during your job search may sound appealing, experts advise people to resist this temptation whenever possible and, if possible, turn to their emergency savings account. That’s because sharp increases in credit balances coupled with applications for additional lines of credit can serve as something of a warning sign for future lenders.
Experts also indicate that it’s important to remember that minimum payments on a credit card for a few months is okay and that your lender may even be willing to work with you (different due date, payment options, etc.) such that a phone call might be a good idea.
Above all else, it’s important to understand that in the event you are unable to find suitable employment despite your best efforts — and your debt has become unmanageable in the process — that you do have options, including the fresh start offered by filing for personal bankruptcy.