If you’ve never been laid off, count yourself fortunate. However, just because it hasn’t happened to date, doesn’t mean it won’t. So, it’s best to prepare for it, in the form of an emergency fund. Worst-case scenario is that it doesn’t happen, but you still have all that cash saved up – always a good thing.
In any case, so that you’re not put on your heels, here’s how to manage your money when you’re laid off.
Start looking for a pawn shop
When you’re laid off, you need to make sure you have enough money to cover your expenses until you find a new job. But what if your money is already spent?
If you need funds in order to stay afloat while unemployed and looking for a new position, start looking for a pawn shop to get getting business funds. Pawnshops offer loans on a variety of items, including jewelry and electronic devices. This means that even if your personal assets are already spoken for, or if all of your belongings are tied up in an estate sale, you can still borrow money from a pawnshop.
The biggest benefit of taking out a loan from a pawn shop is the fact that it won’t require any collateral. If you need to get some cash in hand quickly so that you don’t fall behind on bills or rent payments, pawnshops are an excellent option because they don’t require any collateral at all—the only thing they ask is for proof of income (such as pay stubs or unemployment benefits paperwork).
Learn Where Your Money is Going
You’re going to need to tighten the proverbial belt, which means that you must determine what you’re spending on. Indeed, that monthly Netflix bill and those lattes do add up. You may not always have that good-paying gig, so it’s important to be aware of where your money is going now so that you spend it more wisely.
And don’t forget that emergency fund; you’ll need at least six months of living expenses put aside.
Determine Where You Can Slash Spending
If a furlough is coming down the pike, you must formulate a plan to spend less. Establish a budget that gets rid of most unnecessary expenses, while earmarking some cash for entertainment. Yes, you still want to have enjoyment in life, and you should. Plus, doing so is good for your morale and relationships.
Why not stick with inexpensive places to dine and hit movies rather than plays? You should also mind your thermostat and switch to a less-expensive gym.
Go for Some Severance
When you’re laid off, there’s a good chance you’ll be offered some severance pay. If such an offer wasn’t part of your contract when you were hired, there’s nothing wrong with inquiring. You never know.
Hold Off on Big Ticket Items
If you do get severance, resist the temptation to spend part of your check on the Peloton bike you’ve always wanted, or on that giant TV. You need to conserve your cash. In fact, if you already have serious debt that isn’t tied to collateral such as your home or vehicle, you may want to contact Freedom Debt Relief to get squared away with creditors while you find another job.
Look for Government Help
There is a myriad of government programs that were established for circumstances such as yours, and you should avail yourself of them. You likely will be able to collect unemployment insurance and, depending on your state, you may qualify for help with getting that dream of starting a business going. Such help may include training or loans.
Seek Part-Time Work
If you have additional cash coming in, you may be able to stretch your savings. So, while you hunt for another job, you may want to consider part-time or temporary work to help tide you over, even if such work is not in your field. Perhaps you have a hobby or other interests you can monetize. Just be mindful that your No. 1 priority is to find full-time employment. Therefore, any part-time work you pick up should give you the time and flexibility to pursue that search.
Get Your Name Out There
Sign up with Monster, Indeed.com and any of the other big-name sites to help get you back into the job market. This way, you may get some job nibbles while you sleep or are working that part-time gig. Who knows, you may pick up a position that’s better than the one you had.
Remember, money management when you’re laid off could also mean dealing with taxes levied against any severance pay or unemployment compensation. If you’re simultaneously dealing with unsurmountable credit card or other debt, you may want to pursue debt relief to clean up that part of your obligations.