7 Financial Best Practices Right After a Lay-Off
Getting laid off is is a challenging situation for a number of reasons. It’s a surprise, disruption, and morale hit. But most importantly, it’s a sudden loss of income. If you already have debt and are worried about living off credit cards until you can secure a new job, now is an important time to plan your finances very carefully. Fortunately, you are not the first to face this challenge, and there are more than a few best practices to help you through.
DebtBlue has helped many people in your situation navigate financial safety right after a lay-off, and these tips can help you build a plan to move forward from where you are now.
Priority One
Final Pay and Unemployment Claim
First, make sure you don’t leave money on the table. Pursue your final paycheck and any pending bonuses. If your employer offers lay-off severance pay, pursue it politely but firmly with HR.
Then file for unemployment. Unemployment insurance is your protection against situations exactly like this, so you may have a few weeks or months of supplementary income to help tide you over.
Here's What You Need to Know
Assess Your Finances and Budget
Take a close look at your budget and finances. Look at all your transactions and get a full view of household spending. Now is an important time to minimize costs, and you may immediately see a few opportunities. You may also see a few risks, like high debt payments and high interest accounts that may no longer be sustainable during this break in income.
Minimizing Expenses Tips & Tricks
Cut Back on Optional Spending
Minimize expenses. Cut back on all optional spending. Start with things like restaurant trips, hobby supplies, and streaming subscriptions. Audit all your subscriptions as they can be a real drain and most are optional.
Tweak the thermostat up/down a few degrees to save on the energy bill. Consider how your stored supplies can last. You might even look for a more affordable grocery option – the prices from store to store can be very different and food prices have increased exponentially recently.
The Details Matter, Consider the Following
Choose New Debt Wisely
If you’re thinking you might have to live on credit cards, choose your new debt very carefully. It might be better to take out a temporary loan with better interest terms than your credit card or seek specific financial relief options for funds to fill in the gaps.
When spending on credit, choose your cards with lower interest rates and useful rewards like gas, grocery, or cash back to get more benefit from your choice and less risk if it takes a little while to secure a new job.
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Negotiate Your Debt
Debt payments can represent a big hit to your finances when you’re trying to coast between jobs. One of the best things you can do with existing debt is to seek debt resolution. A debt negotiation can help you reduce interest and secure a lower monthly payment when you need it most. A debt consolidation loan may also be useful.
Seeking Advice Can Be Key
Consult with a Debt Specialist
Seek advice from financial experts on how to navigate your situation. DebtBlue has Certified Debt Specialist who can offer advice and strategize a debt relief game plan. You can also discuss matters with an advisor at your bank. You don’t need to hire a “financial advisor” to get good financial advice, and many will offer you some useful guidance for free or as part of the service you already have.
There are also organizations that offer free financial advice as a form of community outreach, and they may be able to help you, as well.
A Little Extra Goes a Long Way
Explore Gig Work While You Job Hunt
Because finding a new job can take some time, don’t forget that the gig economy is an option. Consider temporary on-demand work you can do to help supplement your income. Offer professional online services through Upwork, household and handy tasks through TaskRabbit, or explore your city making deliveries with the many options like Uber or DoorDash.
This will help give you more time to rebuild your resume and secure a new job that will start the next chapter of your professional life.
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Securing Your Financial Plan After a Lay-Off
Being laid off is a financial challenge, but it’s one you can make it through. With these strategies, secure alternate sources of income, and take control of your debt. DebtBlue can help with our debt relief and negotiation services. Contact us today to consult with one of our Certified Debt Specialists today.