Losing your regular employment can be daunting if you don’t have savings in place. But, you may be due for certain benefits that will supplement your income while looking for further employment.
Also, you may have a second job that you can rely on to fill in some gaps. Depending on how long you’ve been permanently employed, the future may not seem as bleak as you originally thought. Put your thinking cap on and start making inquiries into hidden benefits. Once that’s done, you’ll have a better idea of where you stand.
Severance packages are typically compiled for employees whose jobs have been made redundant, or for those who have been laid off. Find out details about what type of severance pay you can anticipate, and how long your medical insurance will be covered.
It is also in your best interest to access a counseling service through your employer. Make use of whatever benefits they provide in this situation to strengthen your position as much as possible.
They may offer training of aid in finding you a new position. Your employer may also offer assistance in updating your C.V. Whatever help they offer, take advantage of these additional benefits.
Calculate your income and expenses
In this type of situation, it is best to calculate your current financial status. Make use of the time to determine any annuity payment that might be due from insurance benefits that you’ve made over the years.
Factor in your severance package, a second job or household income, and determine your monthly overheads. As soon as you’re clear on incoming and outgoing finances, you’ll be in a better position to make future plans. If necessary, approach loan providers to reduce installments until you acquire full-time employment again.
Draw up a financial plan
After sorting out your budget and contacting creditors to reduce payments, draw up a financial plan to get you through this tough period. Look at how you spend money and check to see where you can cut down on expenses.
Budget for minimal groceries, cut out luxuries and calculate savings on transport costs while at home. Every little bit extra helps at the moment, so you need to be really strict about where your money is going. Look at retirement plans and contact the provider for a payment holiday.
This will extend the period in which you will pay for these savings for several months but may help until you find new employment. Check to see what government unemployment benefits may be due and whether you can dip into any savings you may have.
Financial counseling or review
If your situation seems worse than first anticipated, find out how financial counseling can help. There are many credit counselors available who can offer free advice. They can help you develop a workable plan to see you through the next few months or more.
Find out what types of services they offer, what is free and what they charge for, if the counselors are trained and licensed. Many are non-profits, so it shouldn’t be a problem to source valuable free financial advice from these organizations.
Debt consolidation and refinancing
Your financial counselor may suggest that you consolidate your debt to reduce your overall monthly expenses. The interest on a consolidation loan may be higher and extend over a longer period than desired, but this is a solution worth considering following a job loss.
Alternatively, if you own property, you can possibly take an additional loan out against this asset to reduce your monthly debt. The goal is to stay positive, weigh all your options and come up with the best solution to create stability until you find a new job.