Tips for Reorganizing Your Finances After A Layoff

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The job market is currently suffering the brunt of COVID-19, even as most individuals lose their jobs while some are getting a reduction in the hours they work. The truth is that layoffs are real, and they will affect you in one way or another. The biggest concern for most persons after losing their job is how they will pay their bills and move on with their lives after that.

Since you will need funds and your bills will keep coming even after a layoff, reorganizing your finances, in this case, is not an option. Taking immediate action regarding your finances after a layoff will protect you from the uncertainties and insecurities that set in at such times. Here are some of the financial tips you can consider adopting as soon as you lose your job.

1. Consider Applying for Unemployment Benefits

The first thing you should probably do after a layoff is filing for unemployment. The qualifications for unemployment benefits may vary from one state to the other, but some of the guidelines that inform the same are;

A previous employment record of between 12 to 18 months.
You are currently unemployed or are working part-time.
You are presently looking for employment opportunities.

Note that when you receive your severance package after a layoff, you can only access unemployment benefits after getting your last paycheck. You can apply for unemployment benefits through email, online, or over the phone. Life after a layoff can be tough, and that is why you should consider taking advantage of every government program available for you at such a time.

When applying for unemployment benefits, you need to provide the following.

Your bank account details.
Your Social Security number.
Details on why you are leaving your job.

You can also check CareerOneStop for details on your state’s unemployment regulations as well as the contact details you can use to access the help you need.

2. Review Your Budget

Making significant cuts on your spending is something you will have to do voluntarily after losing your job. You cannot afford to maintain the same lifestyle as before because a layoff is a call to embrace extraordinary measures to make it through each month.

For that reason, you need to note down the money you expect each month, the time you expect such funds, the due date for each bill, and how much you are spending. Focus on prioritizing your basic needs when budgeting by reviewing your daily deliveries, subscriptions, and memberships. For instance, you should consider reducing the amount you spend on online shopping.

Also, if you have a gym membership, you should pause that for a while too. Otherwise, you will incur fees at the point of renewing your gym membership when you finally get back to work. Avoid eating out and unnecessary travel to save cut on your daily expenditures as well.

3. Find Alternative Sources of Income

A layoff is not a ticket to spend time with friends and family, and also enjoy the things you love to do. As much as all that is important, the bottom line is that you still need to pay your bills. So, get out there and find other sources of income that are at your disposal. Sometimes, a layoff can be a blessing in disguise because it can lead you to explore your passion and dreams, which can, in turn, yield great success.

As such, if starting some business on the side or going into self-employment is part of your considerations as an employee, a layoff will allow you to explore these options. Whether you are chasing your dream or searching for another full-time job after a layoff, finding an alternative source of income first is critical.

4. Approach Your Lenders for Relief

Servicing your loans after a layoff is a challenge, and it can attract significant penalties if you do not take proactive action. Part of the things you should do in this case is contacting your banks and lenders for relief. Take time to prepare a list of all your accounts, utility companies, and other lenders. After that, engage each of these lending institutions individually to find out what relief they can extend you.

Ensure you understand the relief terms you will receive from each lender. Assess the fees that come with a relief agreement and ask whether your interest will still be accruing over that period. As such, reading the fine print during such negotiations is paramount, and you should also contact your lenders before things escalate.

5. Assess Health Insurance Options

Health insurance is part of the benefits that most employers extend their workers, but what happens when you lose your job? The fear of losing health insurance benefits grips most individuals after a layoff, and there are specific measures you can take immediately to cushion yourself. Begin by reviewing the layoff paperwork to find out whether there is any coverage you can leverage.

In the case of the Consolidated Omnibus Budget Reconciliation Act (COBRA), you can continue using your current health insurance for the next 18 months after a layoff. You can opt for coverage under COBRA, and by doing so, understand that you will assume responsibility for the full cost of this plan.

If the COBRA plan proves non-viable for one reason or another after losing your job, you can research the health insurance marketplace to find a suitable option. You are also eligible for a special enrollment period once you lose your job, and healthcare.gov provides insight into the plan options you can use.

Conclusion

Losing your job is not a death sentence. You can still lead an ordinary life after a layoff if you reorganize your finances. It may take time to adjust your life after a layoff, but remember that as the days go by, the due date for your bills and other financial obligations is fast approaching. So, as you try to figure out your next move after a layoff and before you swing into panic mode, consider the tips above to be on the safe side.

If you have recently been laid off and have a loan with Koster’s, please contact us. We are here to help and will work with you.