Financial

Financial Advice for The Recently Unemployed

It is a scene being repeated day in and day out, across a broad range of industries, corporations and small businesses alike. Cost-cutting in this poorly performing economy is something that nearly all companies are placing a high priority on. Known as downsizing, cost-cutting, layoffs or “restructuring”, whatever you call it, it always results in the same thing. More people finding themselves out of work and an accident away from staggering financial hardship, if they don’t already find themselves there already! So the question then becomes, how does a person survive this extremely difficult time that unemployment brings? Here are few strategies and advice that will provide you with a plan of action to allow you to maintain your financial and emotional security when finding yourself unexpectedly unemployed.

  • Health Insurance is a Must

Outside of losing your paycheck, the other highly important thing most people lose when becoming unemployed is their all-important health insurance. If you are leaving a company that has twenty or more employees, federal COBRA law was designed and instituted to continue to protect you for an additional eighteen months by staying on your former employer’s health insurance plan while paying your own premiums. It is essential that if you aren’t eligible for this Federal protection, that you find a short-term insurance policy which will protect you until you can get back on your feet employment wise. The number one cause of bankruptcies in the United States, are a result of a health emergency.

  • Claim the Compensation That is Rightfully Yours

If you have been receiving a paycheck then in all likelihood you have been paying into the unemployment benefits system that you are now legally entitled to fall back upon when you find yourself unemployed. It is vital that you file for unemployment as soon as possible after finding yourself laid-off. Unemployment eligibility, laws and regulations vary from state to state so make sure you get the process rolling immediately to assure that you don’t have too great a lapse in time between your final paycheck and your first unemployment insurance check.

  • It Can Be Tempting But You Must Resist

So you have been doing the prudent and smart thing for years and saving for the day when you can retire, and relax for good! Good for you, so now is not the time to undo all of that smart investing and saving. By dipping into your savings whether it is a retirement account of a 401K you could be potentially opening yourself up to significant penalties and/or taxes just to access your money and maintain your way of life. If you absolutely must take out money that was earmarked for your retirement, be sure you take the necessary and simple steps to rollover your money from one savings into an IRA account and then withdraw and you could possibly save yourself a lot of money in the process by way of avoiding the taxes and fees that take your hard earned money all because you need to access it earlier than you had planned.

  • Differentiate Between Want and Need

Of course we all have our little habits such as stopping for a five dollar cup of coffee every morning. While this can be satisfying and part of your “routine”, it is the little expenses such as these that will add up quickly and drain your account just when the money is more important than ever. It is important that during these very difficult and emotional times, you are able to differentiate between things that are essential to your day to day life and what you can truly do without and not miss a beat. You would be amazed how much money you have left over at the end of the month when cutting out the little things like eating out or buying an expensive cup of coffee every morning.

  • Find Them and Use Them

It is possible that you have been overpaying the Government with your taxes for years! While you probably didn’t even realize it, there are likely tax breaks available to you that you didn’t even realize! For example, did you know that you can even get a tax break for being unemployed or receiving a reduced total income over a certain period of time. Do some research because you never know where a little due-diligence can end up saving you a significant amount of money!

 

 


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