I was with this company for more than 10 years. Everything was going great, but one day they just laid me off. I had a newborn and a 3-year-old at home, which scared me off even more. When I left the office, I sat in stunned silence on a bench in the park. I was thinking, how am I supposed to tell my wife about this and how a sudden job loss will affect my family?
Sudden unemployment dropped my income by 60%, and the available savings could take care of us for only a few months. I had already taken short-term loans for students in the UK to fund my distant education. Without a source of income, how I was going to take care of its repayment and other unavoidable expenses. All these grey clouds of thoughts started making me panic to the core.
Now, after waiting for so long, almost after a year, I have found a job, but the way I managed things during a job loss period can really help you stay afloat during your financial woes. If you are dealing with this financially challenging situation, then do read this blog to manage your funds in the right way.
Vital things you should do when you face a sudden unemployment
- Right attitude
One of the biggest challenges that you face after a sudden job loss is getting into the right attitude. The situation might be traumatic, but things can get even worse without a healthy state. Allow yourself to grieve for some days but don’t let this mindset take over your happiness.
You need to keep yourself mentally healthy because you will not be able to resume your work in a bad emotional state. Additionally, with a disturbing mindset, you won’t be able to crack the job interview.
- Use benefits
Your plan should not only consist of brushing your resume while sitting at home. But you should identify and grab all the employee benefits that you are liable to.
Any kind of help means a lot during this financial crisis. Many non-profit organizations are ready to provide medical and food facilities to help unemployed people. You can also manage your immediate expenses with emergency loans for the unemployed in the UK and pay them off whenever you find a job.
- Encash sick leaves
If you have not availed of your leaves, then it’s time to encash them. Some employers also offer vacation leaves. You can reimburse your unused leaves. But once you get the money, don’t get tempted to spend it like that.
Keep this extra money aside to take care of smaller expenses.
- Health insurance
If your employer offered a severance package, then it might also include some medical benefits in the form of insurance. During this time, when you have a limited supply of income, taking care of your health might seem difficult. Even if you fall sick, you might want to save money that could be spent on your medical.
You can also think of switching to your spouse’s health plan. This will make your medical expense more affordable.
How to manage finance and save money on various costs when you have a limited supply of income?
There are a few ways to survive a sudden job loss financially. You need to manage your cash flows on the tiniest things as well. Here are some methods you can incorporate into your life to make the most of the available funds while saving money on each expenditure.
- Follow the 50-30-20 budgeting rule
Whatever you are available with. Ensure that 50% of the money goes towards taking care of your inevitable needs. Earlier, when you had a steady income source, then the rest of 30% of your income was going straight towards your wants, but now you need to eliminate this until you find a job. The remaining 20% will go straight towards reducing your debt and savings.
You need to focus on your necessities during this time. Other things can wait or can be put on hold temporarily.
- Picking a side hustle
Till the time you don’t find a permanent paying job. You can consider picking a part-time job that pays you decently. Part-time work like delivering food, freelance blogging, working as a driver, babysitting, etc., can offer good pay.
When you pick a side hustle, make sure you keep aside some hours for finding a full-time job.
- Sell unneeded
Every household has some stuff that holds value but keeps sitting in the corner. There must be numerous things that you can sell off and earn money which is rarely or not even used.
Several people are looking for the same thing at a reasonable price which is lying in one of your corners of the house. Why not monetize it?
- Reduce expenses
Create a feasible budget that helps you to keep track of your money. It should tell wherever it is going along with the amount. Make a list of necessary expenses like grocery, rent, mortgage payments, utility bills, transportation, etc.
Eliminate all the discretionary expenses like entertainment, travel, memberships, dining, etc. Trimming in these areas will help you save money which you need very badly during this financial crux.
Always remember that this situation is not permanent. You can roll back to your older self when you find a new job and revisit all these expenditures.
Parting thoughts
Losing employment that is solely responsible for taking care of your expenses is unimaginably stressful. Not only do you lose the stable flow of income, but losing the sense of identity and purpose makes things even worse.
It is very important to have a plan to move on the right path in such uncertain circumstances. Allow yourself to grieve for some time and go out. But not let this mindset take over your ability to get the next job. Pull yourself together and work towards making yourself better professionally and personally. The right mindset and the control over available money is the best way to manage your current circumstances.
