There’s nothing more anxiety-inducing than finding out you were laid off. But these days, laying off workers is as normal for businesses as paying their monthly dues. It is a fact that for businesses to survive these days, they have to cut down on their expenses. And what’s the number one expense for businesses? Their employees’ salaries. So, if you find yourself suddenly without a job, what’s the first step you should take?
Check Your Bills
Make a list of your existing mortgages and the monthly bills you pay. Your mortgage repayments are a priority. You cannot default on this because you might end up paying a higher interest rate when you miss a payment. How about the other bills? Can you cut off your internet service at home since most of you have mobile internet plans anyway? You can also consider not renewing the cable contract, as well as other subscription-based services.
Some companies allow their clients to miss payments without incurring fees because of the pandemic. They are not penalizing people for not being able to pay their dues on time. Some credit card companies are also foregoing imposing an interest rate on your outstanding balance. Make sure to call these companies to get a clearer understanding of how these new policies work.
Make Sure You Still Have Health Insurance
Is your health insurance tied to your employment? If so, call the insurance agent and see if you can continue paying the premiums out of your own pocket. If there’s one thing you need to spend on, it’s this. Make sure you are covered by a health insurance company. Otherwise, if you get sick, you will incur hundreds of thousands of dollars in debt. You already lost your job, so you don’t need a huge debt on top of your financial troubles.
Don’t Forget Your 401(k)
You have money sitting in a 401(k) fund. That money is yours and not your employers’ even though they contributed to half of it. You can withdraw your 401(k) because not doing so will incur management fees. Or, you can move it to another retirement account and continue contributing to it. This is for your future.
However, if you need the money right now, the CARES Act made it easier for people to withdraw money from their 401(k). Depending on your total contributions, you can withdraw up to $100,000 without tax or penalty. You can also roll it over into an IRA, so you can continue contributing to it regardless of where you work in the future.
Use Your Savings First
Don’t dip your hands into your retirement account as soon as you walk out of your job. Use your savings and any money you have first. The last thing you want is to withdraw from your retirement fund. That should be your last resort. Your future doesn’t need to suffer because of what’s happening at present.
Find a Side Gig
Now that you’re out of a job, it’s time to find something you can earn from while you’re looking for a more stable income. There are plenty of opportunities on the internet. You can work as a content creator, a social media manager, a virtual assistant, a web designer, etc. Find out what your strengths are and use these to apply for job posts on the internet. Until the coronavirus pandemic ends, you’re going to need to find work from the comforts of your home.
Claim Unemployment Insurance
You can claim unemployment benefits both from the government and private insurance companies. You can get aid for a year from losing your job. The amount at least covers your food expenses monthly. This gives you about a year to find another more stable job.
Start a Home-based Business
Have you always wanted to start your own business but never had the time or the gumption to do it? Now could be the best time for you to do something risky. Since you’ve already lost your job, you might as well do something that even has the slightest chance of succeeding. You can sell stuff from your home. Are you into baking? Why don’t you start offering your freshly-baked pastries to your friends? From there, they can share your social media page and offers to their network.
Consolidate or Refinance Your Debt
If it seems it is your credit card debt that’s bothering you, talk to a financial counselor about consolidating your debt. When you consolidate your debt, you will only be indebted to one company. That company can impose lower interest fees on your outstanding balance. With one payment, you’ll be able to cover all the payments you need to make.
Losing your job is an eye-opener. It will take you from feeling secured financially to suddenly questioning what you can and cannot afford. It will make you take a long hard look at your financial standing and make the necessary decisions to make sure you stay afloat.