In the wake of the coronavirus pandemic, millions have had their jobs and livelihoods impacted. The number of layoffs, furloughs, and jobs lost due to businesses shutting down is unprecedented. Companies across North America are planning to downsize if they haven’t already and corporate bankruptcies are also on the rise. While hospitality and retail industries have been particularly hard hit, few industries have been isolated from the effects.
What can you do to steer your finances in the right direction when you’re dealing with a lay off or job loss? Taking some of these steps to prepare your finances will go a long way toward seeing you through.
#1 Start Saving Wherever You Can
As soon as you find out that you’re going to be laid off or otherwise lose income, it’s time to start preparing to save. Some low-hanging fruit in your budget might include cutting out takeout, dining out, expensive coffees, subscriptions you can live without, etc.
Once you’ve trimmed some of your expenses, put together a budget for yourself that will stretch your savings for as long as possible. This will give you a timeline for determining how long you have before you need to find another job or rely on another source of income.
#2 Contact Your Creditors
Many banks and other creditors are offering different types of debt relief or deferrals to those whose incomes have been impacted by the pandemic. Mortgage lenders have been offering mortgage deferrals and some banks have been offering reduced interest rates on their credit cards. You may be able to find an arrangement that will make it easier to pay the bills and keep up with your debt obligations.
If your creditors aren’t willing to provide relief, consider alternatives like debt consolidation services or a balance transfer to cut interest rates. The less you give up to creditors, the further you can stretch your budget.
#3 Avoid Using Credit Cards
The temptation to use your credit cards when you’re cash-strapped is a dangerous one. The best way to use a credit card is to always pay the balance in full, which allows you to avoid interest while improving your credit score. When you’re unemployed, you may not be able to pay your credit cards off in full. As interest charges start to accumulate, your purchase becomes even more expensive.
#4 Explore Government Assistance
Depending on where you live, you may have access to a wide range of government programs designed to assist those left unemployed by the pandemic. You should take advantage of those relief funds before tapping into savings.
#5 Start Networking Online
Social networking events may be a thing of the past for now, but more and more, professionals are using online tools to network and find work. Social media communities often coalesce around professions and industries. Getting active in these spheres by blogging, engaging in content, and joining the conversation can be a way to start making contacts online.
Getting through a layoff is always difficult. Taking smart steps with your finances will help you stretch your budget further and give you more time to get back to work or make the next step in your career.
