Being laid off from a job can be absolutely devastating; you're not only out of steady income, but you also have to figure out how to protect the finances you currently have. While it's a difficult prospect to consider, it's a situation that can inevitably make you stronger. You are forced to pull up your boot straps and get started. With these tips, that is exactly what you'll be ready to do!
- Contact Your Creditors. As soon as you learn that you're getting laid off, it's a good idea to contact your creditors (mortgage lender, auto lender, etc.) to let them know your situation. You can let them know that you will attempt to make your payments, but that your situation will soon become unstable. Depending on the company you work with, and any plans or insurance coverages you've obtained, you may be able to work out a deal to decrease or stop payments temporarily - or have them cover your payments for you.
- Seek Unemployment. Many laid-off workers overlook the fact that they are eligible for unemployment benefits. And now, because so many individuals have been laid off, unemployment has extended their benefits timeframe. Originally, benefits were provided for 26 weeks; however, due to the recession, benefits were extended an additional 13 weeks.
- Budget / Cut Expenses. This is the time that you absolutely want to stop paying for manicures, spa treatments, shopping sprees, and the such. Instead, you need to create a budget that looks at your expenses each month vs. your savings (and unemployment, if applicable).
- Take Advantage of COBRA. COBRA allows workers to extend their health benefits after they've ended their employment. Normally, you are responsible for 100% of your coverage during this period; however, those who have been laid off between September 1, 2008 and December 31, 2009 can benefit from the government paying 65% of COBRA health insurance premiums for covered unemployed workers up to nine months.
- Begin Paying Minimums on Your Credit Cards. This is typically a practice that is frowned upon, but in critical times, it's best to pay the minimum to make sure you have enough to set aside for other bills. However, keep in mind that paying minimums will result in taking longer to pay off balances. So during this time, be mindful of your total balances due, as well as your credit limits so that you don't exceed them.
- Stop Hanging Out. You may be used to going to Happy Hour with your buddies three nights a week, but you may have to cut back on this and similar activities so that you can use all of your extra cash to put away in the bank.
- Open a High-Yield Savings Account. Now's the time to start saving money in a way that will bring you a return. So if you haven't already, now's the time to open a high-yield savings account so that you can build interest on the money you're already saving.
- Look for Online Jobs / Take Less Pay. Companies are hiring stay-at-home workers in increasing volume. So if you have a significant skill, apply for jobs/gigs that will allow you to work from home. This way, you can save on gas and clothes while still bringing in an income. If you do decide to work out of the home, don't be afraid to accept employment that offers less pay. Also, you might even try temp work so that won't leave you feeling obligated to stay somewhere you don't want to.
- Try a Garage Sale. Most people have items laying around in the basement, backyard or garage that they don't use anymore. Why not take this opportunity to sell them at a garage sale? This way, you can increase your savings without leaving the house!
- Go Back to School. You may be wondering how you can protect your finances by going back to school. This is actually an option that will help you plan for the long term. While you're laid off, you'll be looking for new employment. Why not bring more education to the table to strengthen your qualifications?
- Consider Asking Your Spouse to Work. If only one spouse works, you might have the other work as well. If your the spouse was at home to watch the children, you might consider having a neighbor or family member you trust help you out with babysitting until you can get on your feet and afford daycare. This way you can bring in more income and still cut expenses with child care costs.
- Be Positive! Through it all, it's important that you keep a positive attitude for you and your family. You, like millions of others, can survive the layoff and be back on your feet in no time if you believe it.
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