Managing Your Money While Searching For Work
It’s true what some people say: you are only one pay-cheque away from unemployment. The stability and certainty from having that once-reliable pay-cheque immediately disappears and you need to make both short- and long-term plans to ride things out until you find a job again.
While it is both acceptable and understandable to take a few days to get over the shock of losing your job, this is not an excuse to sleep in and stay up late. This is not a vacation.
The first thing that needs to be done is to identify what remaining income, if any, is still available. If you have a spouse that is also working or shares an apartment with a friend who is still employed, that puts you in a better standard than someone who lives alone. If you loaned any money to friends and family, now is probably the time to call them up and ask then when they can pay you back. If you own any property, have a share in a business, or have an investment portfolio, re-access and tally their current worth. You may need to draw from them, A caution: deducting money from your retirement plan is taxable income so leave that as a final option.
Next comes making sure that your former employer is on top of getting your severance package (if you are eligible for one) or your final pay-cheque with any outstanding vacation pay sent to you. Your employer should make sure your HR department prepares your end-of-employment documentation promptly since you will need it to apply for unemployment or, if things go very badly, social assistance.
Knowing what government assistance at all three levels — municipal, provincial, and federal — is important. Unless you were fired, you are entitled to employment insurance for a set amount of time, and at a certain percentage of your last salary. After all, your tax dollars paid for those programs in case you need them, and you certainly need them now.
With that out of way, how to monitor and restrict your expenses will determine how long your monetary reserves will last. The one important thing to remember is there is a difference between a need and a want. “Need” expenses are what you must have in order to remain healthy and survive, like rent, hydro, water, buying and washing clothing and groceries. “Want” expense are the nice-to-have’s that you can do without, such as restaurant dining, going to the bar or movie theatre, vacations, and computer games. While you should try to get a cheaper deal when paying for “need” expenses, the “want” expenses are those you should put the focus on. “Want” expenses should be cut or outright eliminated.
If you have any credit card or mortgage debt to worry about, while it is tempting to reduce those debts faster so you get more money back down the road, the ideal approach is to pay the minimum amount due each month. It will keep more money in your budget, the creditors won’t have to call your home, and your credit rating is not at risk. It may be wise to let your creditors know of your current employment situation, since it shows you are open with them rather than try to hide behind false promises that you will pay them soon. Some creditors might be able to refinance your debt with a lower interest rate that makes making payments easier.
Cutting expenses only goes so far, though. Finding part time employment, or at least the odd “gig” job, is necessary. Stow your pride and be willing to do any sort of work you are able. It is a tougher leaner economy these days, and your field of employment may not be in great demand. Being open to any sort of work will ensure some money is coming your way for the bills and give you a sense of purpose. It will also show potential employers during the interview that you are ambitious, flexible and willing to work.
Losing your job is stressful and can leave you feeling uncertain about your future, but by keeping a cool head and following the suggestions listed above, you can get through this with money in your wallet or purse.