Surviving Job Loss
posted Monday, October 26, 2009, 14:30 pm
I Lost My Job! Now What?
With new plant closings and downsizing in the news every day, it seems that losing a job is the new “in” thing. Well, it may be “in” but it’s still scary. The stress of the situation often leads to poor choices. I just advised a good friend not to pay off her car. See bullet number four to learn why.
Here are some guidelines for Crisis Money Management. They’re a little different than the guidelines we follow when our income is sufficient and secure.
- Examine and adjust your budget. Consider canceling the cable, eliminating extra services on your phone, changing the deductible on your insurance. Remind yourself these are only temporary adjustments.
- Prioritize your bills. Mortgage payments should top the list.
- Start this minute to track your spending. Look every day to see what you could have adjusted or eliminated – and then do it the next time.
- Do not pay off anything. Creditors want payments every month. If you reduce your debt load by $10,000 but you can’t make the $20 minimum payment on your credit card next month, you’re going to incur a late fee and damage your credit. Hold on to any windfall so you can continue to make monthly payments.
- Look around for things to sell. Then hold a garage sale or make eBay your new best friend.
- Become a one-car family! A drastic measure I know, but my husband and I managed for 18 months with only one vehicle when he lost his job.
- Consider a part-time job. It may not look good on a resume, but it does help put food on the table.
- Call creditors and put away the credit cards. If you’ve been a good customer for a number of years, most will have a plan to help, but you won’t be able to charge if you’re on a special plan.
- Call your mortgage servicer. Most have special work-out agreements for people who suddenly find their income reduced. You won’t know unless you ask. If you can’t work out something on your own, consult a housing counselor.
If these strategies don’t work, seek professional help sooner rather than later. To learn more about ways you can keep your home, or to find a HUD certified housing counselor in your state go to HUD or call 1 (800) 569-4287 (toll-free). To find a credit counselor to help with credit and budget issues go to the National Foundation for Credit Counseling or call 1 (800) 388-2227 (toll-free). For Spanish, call 1 (800) 682-9832 (toll-free).
Having a plan of action greatly reduces your stress and gives back some of the control that was lost when your job disappeared.