Becoming unemployed can happen to anyone. If it happens to you, it’s important to consider some unemployment strategies and map out a course of action to survive the situation.
Strategizing and Making a Plan
The first tip, if you don’t already have one, is to sit down with a piece of paper and make out a basic budget. On one side of the paper, list all of the income sources that you’ll have, such as unemployment compensation. On the other side of the paper, you’ll want to list all of your expenses. Be sure to separate into specific categories.
Going Through Expenses
The top expenses you want to list will be your fixed expenses: mortgage, auto and life insurance, utilities, vehicle payments, and monthly debt payments. Next, start going down that list and contact your creditors to explain the situation. Many companies have programs that allow you to skip payments in circumstances of unemployment without damaging your relationship with them. This will allow you to conserve as much cash as you can for the long haul.
Health and Life Insurance Options
Research your health insurance options. Many medical insurance programs will match or beat your employer-provided health insurance company. However, you will want to investigate that relatively soon because you have to elect whether you’re going to continue with your employer’s plan within six months. Your other tip is you would be better off to use retirement funds that you’ve set aside in a 401(k) and IRAs as your last resort, whether it be for medical reasons or not because withdrawals from those kinds of plans can create a tax burden that you’ll have to deal with for years to come.
Be sure to contact your life insurance company and find out if your coverage includes a rider that allows you to skip premiums during unemployment without your coverage lapsing. Also, if you have car or truck loans through a credit union, they also sometimes offer the option to skip payments without negative effects.
If you have any questions, please send me an email at [email protected]