Unfortunately, many people I know are being laid off or forced to cut their work hours and income. And if the analysts are correct, things may just get worse with more people out of jobs or finding themselves with a reduced income. So what do you do if this happens to you?
The first thing you need to do to save your money is to take stock of what you have. It is important to understand your finances. Make a budget. You can learn more about that by clicking here: How to Get Your Finances in Control.
The next thing that you need to do is to focus on where your money needs to go. The first priority should be the basics of living. You want to pay for your housing, your electricity, your heat, your food and your necessary medicine. You may also need to budget for COBRA and health care insurance. These costs are usually pretty stable, although you should find ways to cut them wherever possible, such as lowering your thermostat, consuming less power and making meals from your pantry. Cut out or cancel unnecessary services.
After your basics are met, you want to reserve money for your job hunt. Getting a new job should be your first priority after arranging for your basic needs. As scary as it seems, it could take you six months to a year to get a job that would replace your current income. You should be putting in five hours a day on job hunting. For this end, you may need money for your phone, internet and transportation.
The next step is to funnel money toward your debt. It is especially important not to increase that debt. Sell assets to pay for your basics before using the credit card. Take on a part time job in the evening, so you can use the daytime for job interviews. You may be increasing your debt anyway by only paying minimum payments on your credit cards. There is no need to make the situation worse.
Keep your spirits up by finding free things to do. Visit the library, local parks and take advantage of free community entertainment.
Mary Ann Romans writes about everything related to saving money in the Frugal Blog, creating a home in the Home Blog, caring for little ones in the Baby Blog and now relationships in the Marriage Blog. You can read more of her articles by clicking here or subscribe to the blog using the subscription box on the right.
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