Prepare for Unemployment
Unemployment can occur as a result of changes in the economy or your employer's financial standing. If you face unemployment, there are ways to prepare and protect yourself financially until you find a new job. Learn how to prepare for unemployment so you can stay financially stable while finding work.
Contents
Steps
- Revise your budget.
- Prepare for unemployment by adjusting your household budget to reflect the lost income. If you don't have a budget, create one that works with your household needs and your savings. If you already have a budget, adjust it to reflect smaller spending amounts and trim any unnecessary expenditures like cable, gym memberships and eating out.
- Prepare to be unemployed by knowing how much you have available in your savings to support yourself until you find a new job. Most financial planners suggest having an emergency fund or savings account to live on for at least six months. Calculate your monthly expenses for rent, groceries, bills and other necessities and determine how long your savings will last. Ask your bank representative if there is a savings plan available to earn more interest so you can make more money on what you have.
- Review your savings.
- Cash in your retirement fund.
- Prepare to lose your job by considering cashing in your retirement fund or 401k through your current employer. While it might be possible to roll this over to your next employer, cashing it in will help you support yourself while you're unemployed.
- Apply for unemployment.
- Unemployment benefits through the government provide temporary financial assistance to people that lose their jobs. This process could take a while. Be prepared by applying for unemployment benefits as soon as you can so they will be in effect when you need them.
- Suspend your bills.
- Many utility and mortgage companies offer temporary suspension of payments to help people with financial hardships. Contact all of the companies you regularly pay and arrange to suspend any payments you can while unemployed. Be sure to find out how long your grace period will last and if there are extra fees you will be responsible for paying once payments resume.
- Start looking for work.
- It's never too early to start looking for a new job if you're losing your current one. Start networking and looking for new job opportunities right away. Revise and update your resume, attend job fairs and review online job search engines so you can get your resume out to as many potential employers as possible.
- Consider freelancing.
- Freelance and temporary contract work opportunities are available through temporary employment agencies. Work could be inconsistent, but it will be a way to get work when you can and earn extra income when it's available.
Warnings
- Beware of any online job offers to work from home that require an investment in materials to get started. These offers are often scams and could result in identity theft instead of income.
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