Covid-19 has wreaked havoc on many people’s lives and has been stressful, to say the least. If you and your family are handling the stress of all of the changes this Pandemic created, it can be a lot. Add on top of that, after the Pandemic hit, you’re suffering from an unexpected job loss and are afraid.
Talk about stress and overwhelm. Regardless of the pressure, there are steps that you can take to protect your family and your finances. These should help lower your fear and anxiety, and give you control by creating a plan.
If you are wondering what to do with your finances, if you lost your job or there’s a possibility that you will, then this article is for you.
After an unexpected Job Loss, Establish your Foundations.
If you or your spouse are going through an unexpected job loss, it’s time to Establish your foundations. Foundations are the most important bills that you must pay. For example, you rent/mortgage, food, automobile expenses, and utilities. Make a list of these things and figure out what is the minimum amount due each month, for each. Is there something else you must-have for survival? Include that in the list, but make sure it’s a crucial item. These foundational items do not include credit cards. They are the bare necessities items that you and your family can’t live without.
Dave Ramsey calls the necessities, the four walls, which he says includes food, shelter, clothing, and transportation. Dave says “In this moment, you have to make the unwavering commitment that your basic household expenses are going to be your top priority.”
Every month pay your foundations. That’s your priority right now. If you lost a job or are expecting that you or your spouse will lose a job, then only pay your foundations and put the rest of your money in savings.
The exception to this rule, is if you lose a job and you have four to six months of savings, then you can pay your foundations, and the minimum amount on all bills.
The whole point of paying the foundations is to make sure you don’t run out of money for the important things like food and your mortgage etc.
Remember an unexpected job loss isn’t the end of the world, especially if you have some savings; it may open up new doors for you!
Call All of the Places you have debts with!
The second thing you will want to do is to call all of the places you owe money too and explain your situation and ask for leeway. Ask them to defer or lower your monthly payments. Explain to them that you want to pay the money back, but you can’t pay what they are asking right now. Get the person you talk to’s name and write that down along with the date and time that you spoke to them. Keep that information all in one place. For example, create an excel spreadsheet with that information, so you know where to find it later if you need to.
According to Capital One “The good news is, many credit card companies have programs designed specifically to help customers experiencing what is commonly known as a “financial hardship”—commonly defined as a drop in income caused by unexpected life events such as a job loss, injury or illness, or emergency event or natural disaster. Needless to say, no one chooses to be in a financial hardship.” Remember, this doesn’t happen automatically, you have to call and ask for it!
Cut out anything in your budget that’s not a necessity. Can you cancel your cable bill? Lower your cell phone bill? Get creative about things you can cancel. Call and cancel these payments immediately. The sooner you can cancel these things, the better. It’s a lot less weight on your shoulders, knowing that you have fewer bills going unpaid.
Create a Budget
Create a budget, so you know what’s going in and what’s going out every month. Now is the time to be intentional about every penny that you spend! If creating a budget sounds miserable, it doesn’t have to be! Read this blog post “Color Code Your Budget for Financial Success” for more information on creating a budget!
The more you have a plan for where your money is going, the better you will end up when the pandemic is over. Do you want to crawl out of a small hole or the Grand Canyon?
Start Saving Money Like a Madwoman!
Save, save, save, all of the money that you can! From here going forward, you will be a saving machine. Your goal is to keep as much money in your savings account as you can.
You don’t know when you are getting your next paycheck. You have to be intentional about saving money wherever you can. Once you are back to a place where your income is more stable, then you can start paying things as you ordinarily would.
How Can You Make Money after an unexpected job Loss?
Just because the Pandemic hit and you lost your job, doesn’t mean you can’t start making money again!
Start asking yourself how you can make money. If you are married, you and your spouse can sit down and have a conversation and bounce ideas off each other about job possibilities or stuff you can make and sell from home.
Ask yourself, can you create something? Can you sell something? Consider selling a car and then buying a cheaper, used car with cash. The remaining money can go into your savings and you can use the cash for your foundational bills. The more cash you have on hand right now, the better it is for you.
Don’t Ignore the Problem, stand up and fight back against the Coronavirus!
It’s so easy to try and put everything onto credit cards and ignore the problem that is going on around you. You are suffering from an unexpected job loss, don’t lose everything else too.
Try not to ignore your finances. The more proactive that you can be about this, the better off you will be. Take it from me, I was $106,000 in debt (not including mortgage), and I felt overwhelmed. I didn’t realize how much debt I had because I was sticking my head in the sand, acting like it wasn’t that bad. I ignored the problem until it just became too painful, and I knew I had to do something about it.
U.S. News says “Don’t hold off on implementing changes. Making these cuts now will make the financial pain of an unemployment period less intense.” You have to address the problem and face it head on. It may be hard but it will help you in the long run!
You’re dealing with an Unexpected Job Loss, but It’s Not Your Fault.
You didn’t ask for the Coronavirus, nor did you know it was coming. So stop being so hard on yourself. The best thing you can do is be pro-active and take action.
If the Pandemic hit and you lost your job, simply put, it sucks! You are probably saying, I’m tired of this! Maybe this situation was going on before Covid-19, but the Pandemic just shined a light on it. Use all of the hurt, the pain, and the anger to motivate you. Get sick and tired of dealing with it and make a change.
Sometimes the things that you are most hurt or upset by can help you to make the most significant change!
I cannot wait to see how you come out of this friend. You will come out of it! Just take a breath and then take action.
I would love to know what is your biggest money struggle right now?
Marie