Financial Planning in Times of Unemployment

Whether your unemployment was expected, or a surprise, there is no need to panic. Financial strategies will help ease the burden while you job search. So take advantage while you search for employment opportunities.

The first step you should take is preventative. While you have a job, you should be putting 10% into an emergency savings account. It is a good idea to save at least 3 months-worth of expenses in that account, and in this rocky economy, 6 months-worth. This will help support and pride for your family during unemployment.. If you have not done this, but are given advance notice of your dismissal, use this time to set aside a portion of your income now. If you didn't save money before, and you don't receive advance warning, it is still okay. While your unemployment may be more difficult than others, you will still survive.

Hopefully you already have a budget, if not, START ONE! This is an extremely important phase of financial planning. If you don't control your money, then your money controls you. Look over your budget and carefully decide where you can cut spending. Some things to consider cutting: magazine subscriptions, cable/satellite television, meals out, expensive forms of recreation, part of the grocery bill (do you really need to have name brand cereal?), and credit cards (can you get by just making minimum payments? Can you roll over your balances to a lower interest card?).

 Also, call up your mortgage company, and let them know the situation immediately. Often, if you are in good standing with them, they will offer a forbearance or deferment. This will allow you to not pay your mortgage, or just a portion of the mortgage, for a set amount of time. If you have outstanding medical bills, call the account holders and tell them the same thing. Most companies will work with you when you offer honest and open communication.

Another important step is to file for unemployment benefits. But don't stop there. Food stamps, WIC, Temporary Assistance for Needy Families (TANF), and Medicaid exist to help people get back on their feet. Do not feel bad if you must accept help. You paid your taxes last year and you will pay taxes again. Don't let pride get in the way of helping your family get through a tough time.

Finally, job searching is your new job now. Touch up your resume. Tell your friends and family you need work. If you find part-time or seasonal work, take it! You can keep looking for a better full-time job and work part-time. Once again, don't let pride get in the way of taking care of you and your family!

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