It really doesn’t matter why you are out of work. You just know that you’re out of a job for an indeterminate length of time and without a paycheck. Remaining calm, knowing what your choices and alternatives are is necessary to develop an action plan.
You must be able to determine what you can do to save on your basic expenses and what is the best way to weather the economic storm in which you find yourself. First and most importantly, do not panic and do not act in a panicked manner. Yes, someone who has lost their job is afraid, concerned about their and their family’s finances. They may not know what to do or how to begin to manage this situation.
Once you have literally caught your breath, take stock of what you have, what your expenses are, and what you can reasonably expect to have as income. If you are eligible, file for unemployment benefits as soon as possible. Review current balances in any financial accounts so you know how much money is available to you and approximately how long It will last. If you have a 401(k) plan, understand the tax consequences of taking money out of that plan.
You may find you need to get a part-time or temporary job. You may have to get creative as you look for sources of income. Check local temporary employment agencies for any work available. If you have an extra vacant bedroom, consider getting a roommate or listing a possible accommodation on Airbnb. Create short term gigs for yourself by offering services to clean houses, do yard work, clean out and organize garages, detail cars, or run errands. Hold a yard sale to sell items that you don’t need. Once you have developed an income plan and budget, it’s time to tackle your expenses.
What’s the best way to save on your expenses? Start with a list of what you owe and when those payments are due. Put priorities on your expenses. Food is more important than unsecured credit card debt. A car payment is important as are any court-ordered support payments. Contact each of your creditors along with your landlord or mortgage company. Explain the situation to them. Create a plan that takes into consideration your income for the next few months, your current list of expenses, and any other anticipated expenses such as property taxes.
Once you have gathered information on your debts and obligations, you can begin to reduce your expenses. Be aware of false economies. You want to save on your expenses. You do not want to end up with an expense item greater than the amount you saved. For example, if you have sold a vehicle or have reduced the miles you drive, make sure you keep affordable auto insurance. Driving without insurance is illegal and an example of a false economy. Being involved in an accident without adequate insurance will-become very expensive. Non-insured involvement could cost you more than the affordable auto insurance you may have canceled in an effort to save money.
Look for local programs that would be supportive of your situation. Many churches and non-profits sponsor free community dinners and support groups for individuals and families in your situation. There are usually several groups in a community that can offer you support or assistance. These will include local clinics and food banks. If you’re not aware of any, check with your local library. They often maintain a list of resources available. There are groups that can help you network and provide support in your job search.
Realize that you are not the first person to lose a job and need support and assistance. You are also not the last. Remember to think things through carefully, ask for help when necessary and you can recover from the loss of a job.