Loss of employment can be a very emotionally difficult time. Fears about finding a new job and anxieties over how to make ends meet have the potential to rob you of sleep and hurt your self-esteem. However, you’re not completely without options. There are a few simple things you can do, some wise decisions you can make with the money you do have, to help cope with debt when you are laid off.
- Carefully examine your situation, thoroughly and with as much objectivity as you can. Take into account any funds you may have, including severance packages, savings accounts, or investments that can be liquidated. The point is to figure out how much you have to work with.
- Take a critical look at unnecessary expenses, such as cable, satellite television, or health club memberships, and consider cutting them. Getting rid of them will decrease your monthly expenditures and free up more money.
- Separate all of your expenses into necessities, secured loans, and unsecured debt. This is about prioritizing. Your first priority is to ensure that you have a roof over your head and food to eat. Then, keep in mind that when it comes to secured loans, you stand the possibility of losing that security for nonpayment. For example, your vehicle could be repossessed for not making your car payment. After these initial priorities is where your unsecured debts, like credit cards, would go.
- Don’t put off communicating with your creditors. Contact them before you’re even late with a payment. Explain your situation and ask about the possibility of a “hardship program”, where your payments may be stopped or limited for a period of time. They may require documentation of your loss of employment, so be prepared ahead of time to provide that.
- Do your best to make minimum payments on your credit cards for as long as you’re able to. Enlist the assistance of a credit counseling service to help with negotiating a payment plan.
Periods of unemployment can be frustrating and emotional. However, by implementing a few simple tips and taking the steps necessary, you will be doing everything you can to create as much emotional and monetary stability as you can in your situation. By getting your finances organized as soon as possible, you give yourself the time and the peace of mind that will help the most in finding new employment.
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Tompor, a graduate of Michigan State University, also has a master’s of business administration degree from Bellarmine University in Louisville, Ky. She enjoys writing about taxes, saving for retirement and other financial issues that affect everyday pocketbooks. Her work has been featured in Detroit Free Press, USA Today, Chicago Tribune, Yahoo Finance, CNBC, Los Angeles Times, Houston Chronicle, The (Toronto) Star, Baltimore Sun, Seattle Times, Miami Herald and more