So you lost your job. In times like these, you aren’t alone. It was reported that 6.6 MILLION people recently filed for unemployment benefits.
Maybe you’re a small business owner like myself. You have some income coming in, but you’ve taken a big hit in revenue.
So what now? What do you do?
Fun fact about myself: I’ve been laid off twice in my life. The first time was back during the last recession in 2008. When that happened, I had no plan and was up to my eyeballs in debt.
I had no job, yet I had tens of thousands of dollars in debt with no way to pay it. I was drowning and I felt like I had nowhere to go.
10 years later when I got laid off again, I learned from my mistakes and I had a plan.
If you’ve lost your job, even if you think it’s temporary, I would recommend following these steps.
Stop Spending Money
Seriously. Stop spending freaking money.
You may be saying to yourself “duh….”
But the cold hard fact is that I have friends who have lost their jobs and are still buying things they don’t need. You don’t need to buy things just because you’re bored and stuck at home.
If you lost your job, even if you THINK it’s temporary, you need to stop spending on unnecessary things immediately.
File for Unemployment
If the government is trying to give you free money, take it. Check out what processes you need to take in your state to get unemployment.
There’s a good chance that you’re eligible to get a small check even if you have temporarily lost your job.
Start a Budget
If you don’t have a budget, now is a great time to start one. When you do a zero-based budget, you’re giving every dollar a job.
Believe it or not, doing a budget actually makes it feel like you have more money.
Why is this? Because when you actually sit down put money into its relevant categories, you aren’t overspending on things you don’t have to have.
Now, since you don’t have a job, you need to be EXTRA strict on your budget. There’s no “fun money” and definitely no dining out. You should make sure your “4 walls” are covered first. Any money over this needs to be set aside.
Not sure where to start? Take a look at the Kicking Debt budget or a tool like YNAB or EveryDollar.
Take Care of Your “4 Walls”
When doing your budget, if you find yourself short on money and need things to cut, make sure you make your 4 walls a priority:
- Housing/Utilities – Your mortgage, rent, and utilities (the necessary ones to survive like water and power – NOT cable TV)
- Food – Get the cheapest and least amount of food from the grocery store. This does NOT include eating out.
- Transportation – If you have a car, this includes your car payment, gas, and insurance payments.
- Clothing – Chances are you don’t NEED new clothes, but if you find yourself in a situation where you have none, it’s important to get some.
After taking care of those, any additional money you have should go towards your debts or any other necessary thing on your budget.
If you don’t have money to pay your debts, they will have to deal with not being paid. Remember, you’re in a crisis right now. Your credit score doesn’t matter. You need to survive.
Stop Retirement Contributions
If you are still putting money towards retirement, you should stop doing that temporarily.
If you have any extra money left in your budget, you need to be putting it into a regular savings account that you have instant access to.
Look For a New Job
This may be easier said than done considering the current economy, but people are still hiring. Apply to anything and everything you can.
You can easily deliver for companies like DoorDash, Grubhub or Uber Eats. These companies right now are looking for workers. Since everyone is stuck at home, the demand for them has skyrocketed. Plus, they pay well and you can make your own hours.
