Surviving a lay-off can be harrowing. But if you panic, it will certainly not help. Whether you are preparing for a lay-off or you have already been laid off, planning your finances is the most important aspect that you have to consider at the moment. And let us find out how you can go about the same in the paragraphs that follow.
Steps for financial planning after a job loss
It is not a Herculean task but what you require at the moment is a sound financial planning, perseverance, and patience. So, let us delve deeper into the important aspects.
Panic is a waste of time-Talk about severance package
If you panic, it will not solve your problem. Let us assume you do not have an emergency fund to fall back upon. What are the other avenues you can turn to? The first step is to negotiate a “severance package” with your employer. If you had already done it when you were appointed, your half work is done. And even if you have not, you can still talk to your employer and negotiate, citing your financial obligations and the very fact that you least expected the lay-off.
Defer any additional financial burden
Even if you have been contemplating taking out a loan account, regardless of whether it is a mortgage or car title loan, steer clear of it now. It does not make sense to approach a mortgage lender or opting for business or payday loans. Short term loans or payday loans will only push you into further debt and will siphon out all your savings if you are unable to repay the loan within the allowed period. Do not forget that these loans attract a huge APR or Annual Percentage Rate. But if you really need funds, you can get an auto title loan without a job or any other collateral loan which you can atleast get in the times of need without any high credit score.
Explore programs offered by the government
You will find that there are a number of government programs, the benefits of which can be availed by laid-off individuals in particular. Find out whether or not you are eligible for unemployment insurance.
Find out whether or not you are eligible for health benefits like COBRA or Consolidated Omnibus Budget Reconciliation Act. Know the state of your retirement and pension accounts. If you are able to access these accounts, you can get some cash in hand.
File for unemployment benefits
Even if you have received a handsome severance package, filing for unemployment insurance makes sense.
At any point of time, working in your own domain helps. This is because you are well-versed in your own niche and you know your job well and will not have to undergo any additional training. Alternatively, if you are unable to find one, you could also try out jobs in areas that have been your favorite past time or your hobby.
This may include helping out a friend with his business or accounts, you can also try out online trading, or assisting your friend in his business or office work.
Do not deviate from financial planning
While you are looking around for alternative methods of earning, make a note of all your financial obligations every month, what you have as savings, your expenses prior to the lay-off, and the most important part is how you can curtail the expenses.
Prioritize your expenses
Once you have the entire financial scenario in front of you, strike off one by one, the expenses that you can reduce or put off for now. Work out how much you have to shell out for your utility bills, medicines, energy bills, grocery shopping, and keep it to minimum.
Try to adhere to a strict financial plan at least till time you do not find another job.