While the recession may officially be over, many among us are still grappling with the possibility of unemployment. If you’ve recently lost your job, there are certain crucial strategies you can employ to protect your finances and navigate your way through this challenging period. It might seem alluring to withdraw some money from your 401k or to secure a second mortgage (like the ones available at http://www.netloans.co.uk/), but unless you are about to lose your house, try to resist these options. Once you deplete your retirement savings, it becomes quite difficult to build it back up. Instead, consider the following alternative strategies:
Trim unnecessary expenses: Chances are, your budget currently includes some non-essential costs. Examine your expenses critically — what is a necessity and what is a luxury? Expenses like cable television and non-business Internet subscriptions are luxuries. On the other hand, groceries are essentials, although you might be able to reduce this expenditure. Could you potentially shop at a budget retailer like Aldi or Save-a-lot for the best prices? Are there any other extras you might be able to limit?
Negotiate with creditors: If you’re worried about falling behind on credit card payments or similar debt, it’s better to communicate your predicament honestly to the credit card company. They would generally prefer to negotiate a payment plan with you rather than have you abandon payments altogether. They might even agree to lower your interest rate. The same holds for your mortgage company, should the need arise.
Postpone student loan payments: For those burdened with student loans, monthly repayments might seem overwhelming during periods of unemployment. If your loan is a Direct Loan facilitated by the government, you might be eligible to switch to a different repayment scheme (like the income contingent plan) that bases your monthly payments on your income. If this doesn’t ease your financial strain enough, consider applying for a hardship deferral. However, be cautious — interest may continue to accrue on such loans, so ensure you understand the terms.
Barter when possible: Bartering might sound antiquated, but it has been making a comeback during these recent financially testing times. If you need a service but don’t have the funds, consider trading something you have that service provider might need. This primarily works with self-employed individuals and might not be possible with corporations.
Don’t hesitate to seek assistance: Several provisions exist to support unemployed people, including unemployment benefits, SNAP, and state-provided health insurance, to name just a few. It’s nothing to be ashamed of – if you need the assistance, feel free to ask.
Explore secondary income sources: Even a small income stream is better than none. There are plenty of online jobs available that, though they might not be directly related to your primary profession, can serve as a financial relief during these turbulent times.
Unemployment can indeed be a daunting prospect, but the right measures can help you manage your finances until you can secure your next job. Do you have any other advice for someone who’s unemployed?
