Money Management Moves after Losing your Job

Money Management Moves after Losing your Job

Unexpected situations are an undeniable part of our lives, inclusive of job loss and pay cuts. Pandemic, voluntary layoffs, company downsizing, trade deficits, and business model restructuring are some of the many reasons due to which employees have encountered job losses.

  • About 3.7 million people faced job loss or attempted temporary jobs in America in 2021.
  • Due to coronavirus third wave restrictions, Canada lost 68k jobs in mid-2021.

Low self-esteem, depression, and stressful feelings come beside the job loss – the sufferers however need to give themselves some time to take charge of such spirits alongside avoiding bad financial decisions like gorging their debit cards, unsecured, and secured credit cards, misusing their savings/ rainy-day funds!

A well-thought plan and its execution, and mindful monitoring can undoubtedly aid you to overcome quite a lot of difficulties occurring post-job loss.

 

Why does a Job Loss Hit so Hard?

We and a big part of our society have paired our jobs/ employment positions with the worth we hold. Whether it’s a sudden or an anticipated unemployment, people may feel embarrassed for not being able to serve their families like before.

 

However, in order to conquer this tricky time and get things back on track (or maybe better than before), it’s crucial to take hold of your mental health, be around positive people, manage your finances, and make conscious money moves.

Money Management Moves after Losing your Job

  • Unemployment and Mental Health

Experts are of the view that unemployment has quite a relationship with anxiety and depression – which in turn affects our well-being.

  • Overwhelmed feelings and emotions
  • Food, rent, education, and other routine expenses are harder to manage
  • In efforts to manage your necessities, less to no money and efforts are left to invest in your mental health like exercise or professional help
  • Anxiety due to the loss of previous routine and workplace’s social interaction
  • Effects on personal lives/ relationships. Not having a job may limit your contributions to your family.
  • Fear of trying something new
  • Sense of being impotent and unproductive
  • In the attempt of giving up to early, people may engage in unhealthy activities like alcohol, gamble, and drugs

This is what the majority of us go through due to the loss of employment, and this is why job loss hits us so hard.

There is no doubt that you will be facing financial strain and emotional challenges, but are you alone? Apparently not! Following money management moves, and self-care initiatives would succor you in this distress:

 

Money Management Moves after Losing your Job

  • Collect Final Payments | Assess Your Income
  • Mandatory Expenses Sheet
  • Budget Reappraisal as per the Current Income
  • Stick to this Amended Budget
  • Narrow Down Your Optional Expenses
  • Discuss with Family
  • Delay Big Purchases
  • Emergency Funds
  • Attend to what is Controllable
  • Part-Time Work
  • Debt Decisions

Mental distress boomed from 19% in 2019 to 27% in 2020 in the United Kingdom. Food insecurity and job loss were found to be the major stressors.

Collect Final Payments | Assess Your Income

While saying goodbye to your company, don’t forget to estimate and collect your final payments if any. Some organizations pay off your balances on the normal schedules while other clear them upon your termination.

Moreover, pre-check for any unconsumed back pay, vacation days, sick leave that should be covered in this final salary.

Now it is time to assess what kind and amount of income would you be receiving in the next couple of months. Noting this down in your budget sheet would help you compare and supervise your expenses.

 

Mandatory Expenses Sheet

After you are familiar with what you would be getting as income, note down the fixed expenses that occur every single month. These may differ depending upon your lifestyle and family setups, although, some of them are:

Mandatory Expenses Sheet

This sheet would not only give you an overview of the fixed expenses but also enable you to prioritize them while facing a budget crunch.

For instance, it seems that you won’t be able to clear this month’s rent on time – you may communicate with your landlord for time negotiation to sidestep any record evictions!

 

Budget Reappraisal as per the Current Income

Create an edited version including your current income, fixed, and non-essential expenses. This budget reappraisal would give you a clearer picture of what sort of expenses you cannot ignore (fixed expenses), and what type of expenses you can skip (like shopping, expensive recreational activities, gym memberships).

YNAB and Mint are some of the many famous budgeting apps available to cushion this process.

The later list will help you save money for future months until you land a new job/ employment opportunity, and get stable!

 

Stick to this Amended Budget

Making notes of these budget reappraisals won’t lend you results until you follow this plan smartly. If practiced with discipline, you would save yourself from overspending your unsecured credit cards, debit cards, and secured credit cards and being wasteful on unneeded stuff.

Still, there are chances that you might be spending on what was unexpected at the time you made this amended budget.

 

Narrow Down Your Optional Expenses

There are some optional expenses: movies, shopping, picnic, gym membership, dining out, magazine subscriptions, etc. Cutting them out totally may not be possible but even if it is – it won’t be easy!

You can plan and pursue cheaper alternatives for entertainment. For example, you can replace the gym with an at-home workout following YouTube tutorials or park walks. Cinema days can be swapped with a theatre setup at home.

Personal touches and close family time makes unforgettable memories, and give us a soothing break from distress, right?

 

Discuss with Family

Not having a job may bring some effects to you and your family as well, keeping it to yourself won’t help long-term. Discuss the current circumstances with your children (keep this discussion appropriate to their ages).

NOT HAVING A JOB

Children are conscious beings, so bringing them into confidence would help you cope with the amended priorities of spending.

Photo by Natik via Pixabay

If your spouse is earning or not, these table discussions can aid in budgeting. You both might end up the discussion with a practical and money-generating idea, who knows?

Forever21, a clothing company co-founded by Do Won Chang and Jin Sook Chang, is one such example!

 

Delay Big Purchases

 Attend to what is Controllable

Even if your savings can afford big purchases like travel, appliances; it is wiser to utilize your time and money to learn a new skill, hunt a new job opportunity, or start a new venture to stabilize your future cash inflows.

 

Emergency Funds

  • 75% of Australians do not have a solid emergency savings fund (2020)

In case of decreased salary, burning your emergency funds is not a smart move. Try spending on what you can afford and avoid expenditures that can not be paid with your current pay.

In case of job loss, try spending these funds with a plan skipping all the frivolous purchases.

Only 4 out of 10 people in the USA can afford emergency cash of $1,000 (2021)

Attend to what is Controllable

 Attend to what is Controllable

To address the current situation like a pro, focus on the right arrow – make adjustments and work hard to pacify the circumstances.

Your expenditures count among the things you have control over! Prioritize the necessary ones over the unnecessary ones. Your time is also under your control. Utilize it productively and plan.

Distribute time between work search, family, self-care (and others) – unstructured days are mood spoilers for sure!

 

Part-Time Work

  • You need around 3 to 6 months to land a job, on average.

During this time, you can earn part-time while expanding your network. In addition to the offices in your State, there are some websites, like Freelancer.com and Upwork, offering a humongous platform for service buyers and sellers online.

Even if you plan on shifting to a new skill set, you can earn its experience from such on-the-web professional platforms alongside making some dollars!

 

Debt Decisions

To treat the money troubles as a consequence of a job loss, applying for debts may seem handy short-term. But the expensive interest rates would annoy you in the future so avoid taking debts/ loans against your secured and unsecured credit cards.

Furthermore, utilizing your credit card unprofessionally can hurt your credit score and affect your borrowing power and creditworthiness in the future.

  • 660 and above is considered a good credit score in Canada (Equifax Canada)

 

Other Ideal Strategies

Other than financial management moves, the following strategies would also cater to you in the process:

 

  • Network

Thousands of jobs are not advertised and these positions get filled by networking. Why not give this path a try then? Seminars, meetings, eating out with former colleagues, LinkedIn, alumni gatherings are some of the many areas where you can interact with this network.

hand shake

You never know that an opportunity uncovers itself through this network community!

 

  • Look Ahead

Indeed not having a job is a crisis, but indeed the journey is a growth process until you land another job in the same, or you make a career path switch or initiate a personal venture.

And getting out of your comfort zone is the first and foremost change you would observe in yourself – which is directly proportional to being more confident and self-reliant!

 

  • Create a Portfolio

You may have some spare time to gather, edit, and arrange your work to format a portfolio which can later be posted on your website or get printed.

You may also utilize this portfolio in online freelancing platforms to get part-time work.

Your portfolio will be a fabulous source of self-confidence and a solid motivator to achieve more in the future!

 

  • Career Path Decisions

Your prior career decisions were made around the time you joined that organization. After the job loss, you may feel that the working hours, company culture, job environment, peer interaction, or workload, etc. in this prior employment position no longer sync with your personality.

You can utilize this time as an opportunity to discover an ideal organization or a new career you have the passion for now.

 

  • Self Esteem and Self Care

It is quite convenient to spend waste hours in bed in self-pity and low spirits. Step up and try overcoming such feelings with a positive, hardworking, and grateful mindset.

 

–        Avoid Being Self-Critical

Losing employment may make you stuck in this phase of self-blame; that you and your contributions were not enough. However, sometimes several other grounds can end you up in this situation.

If there is such an alternative reason behind your job loss (like the company’s financial deficits), there is less to no reason to be so self-critical.

 

–        Remind Yourself your Core Skills/ Abilities/ Achievements

Pen down your skills, achievements, strengths, and abilities. This list would help you feel good about yourself mentally and emotionally and may also help you in the job-searching process.

 

–        Avoid Un-structured Days 

Lack of schedule takes up your life’s control and orderliness. Make a timetable and stick to it to avoid unstructured days.

Photo

 

–        Be Grateful for What You Have

You are indeed living one of your prayers right now. Remind yourself and be grateful. A blessing’s journal is also an enchanting way to ponder upon the bright side of your life.

 

 

 

FAQs

 

Can you feel the grief after the job loss?

It is perfectly normal to feel low after you lose your employment. However, staying in such a phase for a long time can take you even longer to plan ahead.

 

Why job loss is a good thing?

You get a break from those tight and busy work schedules. It can be a great time to pursue a passion you couldn’t find the time for.

 

What to do first after a job loss?

Some of the most significant things to do could be:

  • Update your resume
  • Alter your budget
  • Look for part-time work

 

Does job loss have any effects on future employment?

Well, there is no apparent effect by law. However, some organizations feel reluctant to hire employees who have faced termination due to deficiencies in the accomplishment of their job tasks.

 

Are you eligible for unemployment after a job loss?

Employees are eligible for unemployment benefit programs if they were fired due to a violation of company laws or misconduct. On the other hand, they are eligible for such benefit programs if they face job loss without their fault.

 

Is an employer bound to tell why you were fired?

Lawfully he/ she is not bound to disclose a reason but only if there is an employment contract.

 

 

 

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