Losing your job means money decision start to really matter

Posted By: Matt in Frugality on 11/30/2015 at 12:02:53

Who ever wants to lose their job· The feeling is gut wrenching, and even the words written are tough to comprehend.

In short, you may just like your job. In fact, you might loathe it. But the reality of the situation is your job equals money in your pocket every other week for most of us, and you've worked diligently to save, spend and budget accordingly with that net income in mind.

So what do you do financially when that job goes away, you're out of work, and the income you once had is either completely gone or a fraction of what it was·

Well, the easiest answer from a money and savings standpoint is to immediately start the unemployment process so you have some income. You'll want to rework your budget to change those figures to reflect what is now considered money coming in as far as income (more on that in a second).

You also would be wise to take stock of what you already have on hand money wise. That is specifically related to seeing how much you have in savings and if you're leaving this job with any 401K or retirement money at your disposal.

Now, that isn't a full blown reason to literally dispose of it (you're not going to take a Disney World vacation to celebrate "early retirement") but rather to determine if you want to roll that money over and not pay an early disbursement penalty or if you really can't live without that money in your pocket to pay your bills.

The fact remains that the best move is to leave that money alone and roll it over, but if your savings account isn't up to snuff or is very low, you'll have to use that money as if it more readily accessible to you.

And perhaps the most obvious answer to what to do about being laid off is, in fact, looking over your budget. You have to most likely start cutting ferociously and without worrying about the "what ifs" or entertainment value often associated with what we do.

That might mean no more cable or internet, phone data or those bi weekly massages that leave you feeling comfortable then but less now that you can't afford them. You'll also have to kill off that restaurant and eating out budget along with steering clear of the mall or your favorite retailer for a while since clothing and gadget go out the window, too.

Being unemployed is frightening but doesn't have to be the end of you financially. Use whatever cliche you want (belt tightening, cutbacks, etc.), but the fact remains that losing your job simply means minding your money that much closer.

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