Paying the bills and putting food on the table isn’t always easy, even when you're working. So when tragedy strikes and you become unemployed, it can be an incredibly challenging and difficult situation. Whether you've been fired, made redundant, your company has gone bust or your contract has ended and won't be renewed, here's what you need to do with money if you've found yourself out of a job.
Start A Barebones Budget
Living as frugally as possible for a period of time is the first step. Work out what your basic, essential items and costs will be and spend only on these things. For now at least, everything else should be considered an indulgence. A budget calculator or a virtual assistant can help you create a budget and stick to it in the long-term, and when it comes to debts, remember to negotiate deals. Creditors would rather get their money in dribs and drabs than receive a total of £0. Unfortunately, many companies take monthly premiums and payout when people are struggling most, however experts at Longtermdisabilitylawyer.com can keep them honest by fighting back. If you phone up and explain that you're going through financial hardship, many will either give you a payment break or accept token payments of £1 a week until you're back on your feet.
Dip Into The Emergency Fund
If you have an emergency fund then now might be a good time to consider dipping into it. Only withdraw enough to live off and then re-evaluate, it can be stressful spending these hard earned savings but that's what this kind of buffer is there for. Remember, you can always save again in the future- right now is about survival. If you don’t have an emergency fund, learn how to go about it at moneycrashers.com and get saving once your finances are back in order. If you have any savings as well as debt then you're best paying off mounting arrears as debt is expensive and will continue costing more and more each time a balance rolls over.
Look into Side Hustles
If you already have a side hustle that earns you some money, such as freelance writing, blogging or an Etsy shop you could look into ways to earn more from this for now. With more time on your hands to commit to this, you may be able to scrape by or even end up doing quite well from your venture. If you don't have a side hustle, do some research into things you could potentially do, even if it only earns you a bit of extra pocket money this can be really handy at a time when your finances are extremely low.
Apply For Benefits
Being on state benefits is a position that few want to find themselves in, however this can be a lifeline when you're in a difficult situation. It’s a means to an end, take the benefits now so that you can recover in peace, afford your rent, food and bills without getting too far into debt and then get back to work as soon as possible. If you have a side hustle, make sure to declare this so that you're being paid the correct amount and staying within the law.
What would your first steps be if you lost your job? Have you ever been in this situation?
