Financial

Simple and Realistic Financial Strategies for the Unemployed

Developing a strategy or a plan of action when becoming unemployed is both essential and difficult at the same time. For many, losing their employment status leads to quickly dipping into and emptying of their bank accounts leading to bankruptcy and more hardship than ever previously imagined. Developing and instituting a strategy to nullify the negative effects of losing your job can be the difference between maintaining your lifestyle or losing everything you have spent so long building up! For many if not most, it can take a while to find a new employment opportunity, so creating a sensible plan of action can and will help you tread water financially and emotionally until you are able to get back on your feet and turn things around.

In your new or current unemployment situation, you will quite simply need to make less money last longer and go further than it ever has before. Now is the time to be frugal, but not necessarily cheap. By remaining focused on your long-term financial health and viability you will be in a far better situation in every possible way to ride out this personal storm you find yourself in. Here are some easily instituted and utilized financial strategies for the unemployed:

  • Income Flow

While you are in the process of looking for a new job, you need to begin to think outside the box as to ways you can increase or receive any sort of cash flow whatsoever. It can be tough to part with your possessions but tough times call drastic measures, and selling items that are collecting dust around your home can be a great way to create a positive cash flow into your bank account. Other options for temporary financial relief can be as simple as renting out a bedroom in your home/apartment, doing odd-jobs like walking dogs for the neighborhood or mowing lawns. Anything is better than nothing when it comes to making money.

  • Budget, Budget, Budget

So you are unemployed, the fact is you need to quickly and immediately cut your overall expenses. You need to begin tracking your spending habits like never before to find new ways to save a little money here and there which will add up greatly over time. There are plenty of spending expenditures that can be cut or reduced altogether like cell-phone plans, dining out and/or personal entertainment like going to the movies or purchasing new clothing.

  • Creditors Create Trouble

There is no worse time to dig yourself a deeper hole when it comes to your personal debt and your credit score than when you find yourself unemployed! It is essential now more than ever that you are in contact with your creditors if you have loans for a home, education to attempt to hammer out a deal that may allow you to temporarily reduce your overall payments to the creditors or perhaps establish an agreement whereupon you are working to pay them back under a long-term payment reduction plan or possibly, if lucky a complete suspension of payments altogether until you find another employment opportunity.

  • Retirement is For The End

It is can be easily justified when thinking here is this money I have earned over the years, and it is just sitting there in my retirement account! While this is try, many of these retirement accounts can charge you obscene rates, fees and penalties for withdrawing this money before the agreed upon time. It is absolutely vital that you avoid dipping into these retirement savings accounts because they only serve their purpose if you leave the money invested until you officially retire.

  • Health Insurance

While it will depend heavily upon particular specifics when it comes to your ability to do so, but if you had health insurance through your job, it is possible that you can purchase continued coverage under a plan known as COBRA. Under COBRA, you generally speaking have up to sixty days to sign up for coverage. This is the best option for most people, yet isn’t an option for all people.

  • Home is Where the Heart is

For those who are lucky enough to call themselves homeowners, you have the fantastic yet risky option of utilizing your home equity line of credit. This is risky because of your ability or lack thereof to be able to repay the loan. By taking out a home equity loan, you are putting up an incredibly important personal part of who you are as collateral, meaning that default could lead you to losing the place you call your home, or result in your declaration of personal bankruptcy, which will in all likelihood absolutely demolish your personal credit score.

There is perhaps no more important aspect of becoming unemployed than to create a well thought out and well-crafted plan of action and/or strategy that includes financial planning and assessment, budgeting and conservation of financial resources. By keeping your finances in shape during this tough time, you can focus on the important aspects of unemployment like searching for and finding a new job to get yourself back on your feet and in a better overall financial and emotional place in general.


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