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Finance

Finance Guide: Moving Money to Make Up for Losing Your Job

Losing a job impacts not only a person’s financial situation but also their health. Some may experience great emotional stress caused by sudden income loss. It can take a heavy toll on your relationship, mood, and overall mental well-being. Depending on the circumstances, a person who just lost their job may blame themselves for shortcomings or feel powerless in taking control of their lives.

If you’ve just lost your job, give yourself time to grieve and face your feelings. That’s the first step for adjusting to unemployment, getting back your control and self-esteem, and accepting reality. Dive deep into hobbies and fun activities, eat well to keep your focus, and stay positive. But besides your health, your finances also require more attention now. For that, we’ve listed steps you can take to manage and protect your finances after a job loss.

  1. Look for unemployment benefits

Losing a job doesn’t mean you’ll also be cut off from all kinds of programs or benefits of your state. The key here is to know which ones you’re eligible for. This could widely vary from state to state, so don’t forget to do your research. Unemployment or relief programs are designed to provide temporary support. They are not made to replace your entire paycheck. Look into your state’s official unemployment website for updates. This is a much safer step to take instead of rushing off to creditors or lenders right away.

  1. Consider mortgage refinance

Another smart financial move to make is refinancing your mortgage. This can significantly help you in cutting your monthly expenses and saving more money. The most credible mortgage companies offer refinance loans to help homeowners have a lower interest rate and monthly payment.

With this, you have one less financial problem to think about. Other benefits of mortgage refinancing include shorter terms, predictable costs, and debt consolidations. Applying for a refinance will often require you to have a good credit score. Talk to several loan providers and check out the features and benefits included in their offers before making a decision.

  1. Temporarily pause bill payments

You’d be surprised about how companies and lenders can help you with your payments, especially for a credible reason like job loss. Plenty of companies in the US can consider pausing payments for their customers who just lost a job.

They may also grant you alternative payment plans in case the income loss greatly impacts your finances. The good news is, they generally don’t penalize their clients for late or missed payments.

What you need to do is to call the company and ask. Typically, these arrangements are offered on credit card debts, auto loans, student loans, and utilities. Some companies may reject your request, but there are surely ones who will approve it, especially if you’re a good payer or loyal client.

  1. Create a new spending plan

One of the easiest ways to protect your finances following a job loss is by cutting your budget. But you have to do it smartly. Depriving yourself too much with necessities may lead to greater stress.

First, create a weekly or monthly budget and decide how much you can cut from groceries to recurring bills. You can start cutting back on the nice-to-haves such as magazine subscriptions, streaming services, and even food takeouts or deliveries.

Knowing how much money you can access from other sources can help you create a better spending plan. These sources include unemployment benefits, government assistance programs, and emergency savings. Other things you’d need to consider for starting a new spending plan are retirement savings, debt payments, emergency funds, and college savings for the kids.

  1. Set aside cash for job search

The last but still important thing you should miss is setting aside money for your job search. The amount can vary depending on your goals and needs. For instance, you might need to set aside payment for a professional resume writer who can effectively present your experience and skills to potential employers. These experts know how to make your application stand out on applicant tracking systems, so you might want to consider saving money for that.

Plus, you’d also need cash for daily job search expenses such as transportation, new interview clothes, and hairdresser appointments. Making a good impression is crucial when applying for a new job, so be sure to invest in it.

Dealing with finances after losing a job can be overwhelming for anyone. However, you’d want to take the necessary actions as early as you can to avoid further money problems. Delaying a new financial and career plan can worsen your unemployment stress. Use this guide as your starting point.

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