Losing your job can bring many stressors into your life, not the least of which is a change to your financial situation. Below are some financial strategies and solutions when adjusting to job loss:
- Don't wait to file for unemployment. If you are laid-off, file for benefits right away, which in most areas you can do online or by phone. Waiting to do so could possibly delay your benefits. To file an unemployment claim, request benefits, or to learn more about unemployment benefits, log onto the Kentucky Office of Employment and Training.
- Make a budget for a simpler lifestyle and stick to it. Shop for cheaper alternatives; pass on unnecessary purchases like eating out at restaurants or $4 coffee. Prioritize wants versus need.
- Remember your situation is temporary. According to the U.S. Bureau of Labor Statistics the median duration of unemployment in January 2010 was 20 weeks.
- Research different health insurance plans. Your company may provide COBRA, but that is not necessarily the best alternative. The U.S. Department of Labor has additional information on COBRA continuation health coverage, including eligibility requirements.
- Clip coupons and shop the sales. Everyone is feeling the recession, including retailers, and there are many deals to be had. Don't forget to grocery shop on a full stomach-you will be less likely to impulse buy.
- Examine your lifestyle and aggressively cut what you do not need. Certain services can be avoided like weekly car washes or multiple lessons and sports for your children. Remember the situation is temporary and you can pick up where you left off once you get another job.
- Shop around for low interest rates on your credit cards and no fee services at banks. Pay particular attention to the fine print. Also check your services to see where you can save money, i.e. a lower rate plan for cell phones, getting rid of your land line, checking your insurance premiums, etc.
- There are lots of options for free entertainment, so stop paying so much at the movie theater and explore what is available in your town. Movie night at the local library or a concert in the park may be an option in your community.
- Try to think long-term. Your job loss is temporary, so continue to keep your mortgage and car payments a priority. Take money out of your retirement plan only if absolutely necessary. Such withdrawals will cost you penalties and taxes and impact your long-term financial plan.
- Check for a consumer counseling agency in your area. For a nominal fee or for free, these agencies will look over your finances and help you devise a plan that will best fit your own personal needs and situation. Remember there are good and bad credit counseling agencies. An agency with a non-profit status does not necessarily mean it is free or even low cost. Your local bank may be able to help you identify a legitimate credit counseling service.
- Consider taking a temporary job in order to generate more income, even while on unemployment. If you are working less than full-time, you may be eligible to collect partial unemployment benefits. This may also extend the period in which you are eligible to collect unemployment.
It is a lifestyle adjustment, but if you plan carefully, you can pull through the difficulties of unemployment with few long-term effects!