Unemployed? Follow These Tips to Keep Your Finances in Order

Whether you were recently laid off or have been on the job hunt for a while, if you’re one of the 6.3 million Americans that are unemployed, you’re likely very familiar with the financial struggles and uncertainty that can come along with joblessness.

Thankfully, there is assistance available to you, along with some key financial tips you can implement today to help keep your finances in order as you work to get back on track. 

Step One – Apply for Unemployment Benefits

Unfortunately, applying for unemployment benefits is not an overnight solution, so you’ll want to get the process started as soon as you can to reduce the length of time you go without income. 

According to the US Department of Labor, while each state has its own eligibility guidelines, those who qualify for unemployment usually are:

• Unemployed through no fault of your own. In most states, this means you have to have separated from your last job due to a lack of available work.
• Meet work and wage requirements. You must meet your state’s requirements for wages earned or time worked during an established period of time referred to as a “base period.” (In most states, this is usually the first four out of the last five completed calendar quarters before the time that your claim is filed.)
• Meet any additional state requirements. 

To find out if you qualify and to apply, contact your state’s unemployment insurance program to file a claim (this can be done online for some states), which is typically reviewed and either approved or rejected within two to three weeks.  

Step Two – Recalibrate Your Budget

If you had a budget in place before becoming unemployed, chances are it’s time to adjust that budget to make up for any financial deficit you’re now experiencing due to a lower income (or lack thereof).

As part of this recalibration, it can be a smart idea to temporarily reduce any extra expenses and live well below your means to ensure you can keep up with necessary financial obligations, like housing payments and groceries. Take a look at your monthly budget and reduce any expenses that are not necessary to your survival. This includes cable and streaming services, dining out and entertainment, and other subscriptions that you can realistically temporarily live without to save as much additional cash as possible. 

Once you’ve reduced your total monthly expenses, you can rejigger your budget to better align to your updated monthly cash flow as you look for new streams of income.

Behind on bills? Follow these 5 tips to catch up

Step Three – Prioritize – and Defer – Payments 

When you’re strapped for cash, some monthly payments need to be prioritized over others. Above all else, start by ensuring you keep a roof over your head and food on the table – meaning prioritize your housing and grocery bills first.

If you’re deep in credit card debt or have other monthly debt bills, some lenders may let you work out deferred or budgeted payment plans so you don’t fall too far behind. Keep in mind that you will need to pay back the full amount, but temporary assistance can help you stay afloat when you’re strapped for cash.  

To set up payment or temporary deferment plans, call your credit card companies and other lenders and be open and honest about the recent change in your financial and job circumstances. Certain providers may have programs designed to support those experiencing job loss, including:

• Utility companies, who may allow you to postpone payments and.or sign up for a budgeted billing plan
• Credit card providers, who may accept lower minimum payments on a temporary basis
• Student loan providers, who can adjust your monthly payments to an income-driven amount, or even put your loans on forbearance.

Finally, if you’re not unemployed, the best time to prepare is now. By building up an emergency savings in the case of potential unemployment, you can help safeguard your financial future. 

While most financial experts recommend having an emergency savings equivalent to three months of living expenses (that’s all of your bills, including housing, groceries, and monthly expenses), any little bit can help in providing more peace-of-mind, and financial security, in the case of an unpredictable job or financial loss in the future. 

LEGAL DISCLAIMER

The opinions expressed in this post are for informational purposes only. To determine the best financing for your personal circumstances and goals, we advise you to consult with a licensed advisor.