There are more than 10 million Americans who are unemployed, it’s perhaps needless to say that millions of consumers are in dire need of financial advice. With the crippled job market and the unemployment rate stubbornly hovering at a ‘close-to-double-digit-rate’, managing money during times of unemployment is a big question in everyones mind. It is certainly going to be different from the way you tackle your dollars when you’re employed and you’re drawing a fixed monthly salary each month. Before you know the particular ways in which you can manage your finances during unemployment, you should be aware of the fact that two individuals can never go through the same financial condition while they’re unemployed. While someone may not have a single penny that he can save, someone else might be married and might be happily depending on his spouse’s income until he reaches a conclusion. Managing debts when you’re jobless is pretty intimidating, even if you may opt for consolidation to alleviate the burden. Check out some DIY ways to tackle money while you’re unemployed.
- Ensure getting the income that you’re entitled to: While you were working, you must have saved a portion of your income in the bank. In case you’re entitled to unemployment benefits, you should immediately file a claim by contacting the State Labor Department. Also ensure your employer pays you accurately for the time through which you’ve worked for them. And if you’ve been saving money in the 401(k) account, you should get yourself educated on the details of rolling over the account to your personal account. Unless you go through dire financial straits, you should not cash in your 401(k) account as this may lead to unnecessary tax charges.
- Prioritize the monthly debt obligations: When you’re living on a tight budget, you should maintain an order in which you should pay back your monthly debt obligations. As the roof above your head is the utmost thing that you may need, you should primarily pay your rent liabilities and the mortgage installments. Water and electricity bills should also be taken care of. Next you may pay for your medicine and food and last but not the least, you can check if you’ve made the entire car or the auto loan payments. If you owe credit card debt, the collectors may call you but don’t let them trick you into paying an amount that is more than what you actually owe.
- Say ‘No’ to credit cards: Yes, credit cards may seem to be the most convenient financial tool that can enable you to purchase things without cash, but if you start misusing them, they may entangle you in the debt cycle. Do not fall into this trap by using your credit cards whenever you visit the shops as this may aggravate the stress. Carry cash instead of credit and say goodbye to impulsive shopping.
- Keep collectors and creditors at bay: While you’re digging out of debt, if you lose your job, it is most likely that you’ll fall back on the monthly debt obligations and the creditors may contact you for recuperation of debt. An even bigger problem is the interest rates and the late fees that accrue. You should immediately contact your creditors and tell them that you’ve lost your job so that they may put you on a hardship plan through which you may continue repaying your debts, but in smaller and affordable monthly payments.
Keep hunting for jobs until you can settle in a new one. Given the present financial conditions in the US, leading life without a job can truly become stressful. You have to make a lot of payments in a single month and for that you need liquid cash. So, don’t stop looking for a job so that you may not have to go through this fretful experience for a long time.
Samantha Spuckler is a writer for various finance related Communities including Debt Consolidation Care. She is a financial writer by profession and has specialization in dealing with financial problems and its solutions.