Coping With Finances During Unemployment

Although it may be fun to fantasize about life without a job, the reality is that it can be just as stressful to be unemployed. When you are out of work, you don’t have a steady income coming in or any income at all if you don’t qualify for unemployment benefits. Therefore, what are some financial coping strategies that you should learn to make sure that you can cope during periods of joblessness?

Look Into Debt Settlement Options

If you have some money left in the bank, it may be a good idea to consider debt settlement. For instance, your credit card provider may take pennies on the dollar to close your account instead of spending a lot of time and money in the future chasing a customer who can’t pay his or her bill. This may be a good way to keep your credit score as high as possible until you are able to return to work. Keeping your credit intact may help you qualify for loans if you need them during your job search.

Prioritize Your Remaining Bills

In the event that you can’t pay all of your bills during unemployment, prioritize the ones that matter the most. Generally, you want to make sure that you have enough to pay your rent or mortgage, utilities and have enough left over for transportation. You also need to leave room for food, medicine and other essentials that you need to get through each day. These are the expenses that you should dedicate your remaining savings to or use your unemployment or other benefits on.

Do Whatever You Can to Make Money

The internet makes it possible to make money even if you don’t have a full-time job. Doing freelance work can help you bring home a few hundred dollars a month or more depending on who you work with and how much work is available. In some cases, you may be able to turn a freelance gig into a new career that may pay more than your previous jobs. However, your main goal should be to bring in enough to help you stay in your home or make sure that you can provide the basics for yourself and your kids.

Consider Downsizing

To help you raise cash and lower expenses at the same time, you may want to consider selling your home and moving into a smaller one or into an apartment. Depending on where you move, you could save hundreds a month on your rent or mortgage payment. You may also pay less in utilities, lawn care or maintenance as well, which could save additional money each month. If downsizing isn’t something that you want to do, consider adding a roommate until you are able to handle your full mortgage or rental payment.

Don’t Let Creditor Calls or Letters Get to You

From an intellectual standpoint, you may not be too concerned about not paying your bills. After all, you know that would pay them if you had the money to do so, and losing your job was not necessarily intentional or your fault. However, those creditor phone calls and letters will start coming once you fall a couple of weeks behind on any payments that come due. The best thing to do is continue to realize that the situation that you are in is only partially of your doing. Other than that, all you can do is ask for new payment terms or consider filing for bankruptcy if there is no other option.

Bankruptcy May Help You Clear Your Debt

Filing for bankruptcy may be an option for those who are spending a large percentage of their benefit checks or other income on debt. Most unsecured debts such as credit cards or payday loans can be discharged in bankruptcy. Those who have car title loans in Jacksonville or elsewhere may be able to reorganize their secured debt by filing for Chapter 13 bankruptcy. Typically, those who are not working will file for protection under Chapter 7, and it may be possible to do so without losing property.

If you are unemployed, it is important that you understand that you may have to carefully watch every dollar that you have. Instead of going out to eat, it may be necessary to make a sandwich at home to ensure that there is money left over for other essentials. However, with a good support network and good planning, you can cope with having limited financial resources and focus all of your energy on finding a new job.