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Job loss is not easy. It brings uncertainty, stress, and worry. It’s made worse if you aren’t financially prepared.
During the 2008-09 recession, I was furloughed while my husband lost his job completely. We were barely scraping by at the time, with no savings in place. So, the sudden loss of income made for a lot of stressful nights of no sleep. Had we followed some of these steps, our money issues would have been much less during that time.
So, I’m sharing all of the steps we should have taken that would have made a world of a difference during our financial hardship.
If you’ve recently suffered a loss of income in any way, there are some things you can do to make your survival process a bit easier. Some steps may even help you create better money habits long term, so that you’re always prepared for financial fluctuations.
Here are 5 steps you can take to help you survive job loss right now:
1- Create a Basic Budget
Creating an ideal budget won’t cut it here. You need to create what I call a bare bones budget. This is a budget that includes only bills and absolute necessities.
While I’m a huge proponent of adding in a little fun money in your standard budget edition, this budget is quite different. You are creating this budget as a temporary tool to help you get back on track with your money quickly. So, it’s essential that you cut back as much as possible in your spending plan.
Once you pass this financial hurdle, which you will, you can go on to create a more inclusive budget that gives you some financial breathing room.
But, for now, here’s what you need to add to your Bare Bones Budget:
- Car Fuel
- Insurance (Health, Car, Life)
- Necessary Bills (school fees, etc.)
- Emergency Fund
2- Reduce/Eliminate Expenses
It’s critical that you save as much money as possible right now. So, you need to go through all of your bills and payments and do some research to get lower prices. Research your options online, call your current providers and negotiate a lower price or see if there is a promotion you qualify for.
Eliminate as many subscriptions as possible.
Cancel the gym membership and find a free alternative, like youtube fitness videos, running around your neighborhood, or work out with friends.
Cancel your cable and invest in a $25 antenna to watch network television (yes, that still exists and it’s absolutely free). Watch youtube videos or read a book instead.
Drive less by taking public transportation more (if possible). It will reduce your fuel cost, as well as maintenance for your car. It also reduces your car insurance, since your mileage will be less.
I know all of these seem harsh, but this is temporary. Right now, you are in survival mode, so it’s important to remove as much fluff from your budget as possible.
Survival is a mindset, you need to have no mercy in slashing your expenses to as low as you can possibly get them. It will help you weather this storm and have you back to financially stable in less time.
3- Cook More At Home
I know it’s harder to find the energy to cook when you’re stressed (unless that happens to be therapeutic for you, in which case that’s awesome!). But, cooking at home can really help you control your spending and help you increase your savings.
I find that batch cooking really helps me when I’m feeling stressed. I take just a couple of hours per week and batch 5 meals so that I have enough weekday dinners.
4- No Self-Pity
You, my friend, are not pitiful. You will get through this, but it will be 10x harder to pull through if you start to feel sorry for yourself. Take this extra time you have to be productive, proactive, and hopeful.
Nothing bad (or good) lasts forever. You WILL find another job or you’ll create something that provides a steady income. In either case, you WILL survive this financial hardship if you keep your mindset focused on the positive.
So, no self-pity. Take a day to reflect, feel your emotions, but then, you dust yourself off and move forward.
5- Don’t Charge to Credit Cards
I know it’s easy to feel like your available credit card balances are there for things like this. But, if you cut back on your expenses and are diligent about how you spend your money, you truly can avoid having to charge anything to your credit cards.
When I was in college and money was extremely tight, I made the mistake of using my credit card for groceries. It only created a habit of charging on my credit card more and more and before I knew it, I was in piles of debt I didn’t know how to pay for.
If you’re struggling to make ends meet, even after you’ve cut back on your expenses as much as you could, there are other options.
Declutter and sell items for some extra cash, host a garage sale, have a roommate moving in and split rent. There are so many ideas (conventional and unconventional) that can get you through this without putting you in debt.
Additional tip- Apply for the Hardship Program with Lenders
Speaking of debt, call your creditors and let them know that you’ve suffered a loss of income. Most lenders have a hardship program that will help you in times of sudden income drops. They may be able to put you on a payment plan, defer payment or reduce your interest temporarily until you get back on your feet.
In any case, it’s a good idea to contact your lender to find out your options.
Thrive to Survive
Your mindset is everything right now. It’s the very thing that can help you through this or destroy your chances of overcoming this setback. Keep your mind right by focusing on your goals, staying proactive in your job quest or thinking of creative ways to make a living.
Strengthen your mindset by listening to empowering podcasts, reading uplifting books, journaling, or creating a new path for yourself.
Job loss is a hard set back, but it doesn’t have to be permanent. I hope these tips help boost your survival mode. It’s time to tackle this financial hardship and get to the other side stronger, more resilient, and more financially stable in the process.