Simple Tricks You Can Follow To Manage Your Budget When Losing Your Job
How to manage your budget when losing your job. The coronavirus pandemic claimed thousands of lives and almost the entire world is locked down in some manner. Chances are that if you are reading this, then your life also experienced an impact in some manner by this outbreak. While most people experience indirect impacts by the virus and they have to stay at home, some, however, are directly being affected by the virus. Among these are those who are sick and those who have lost their jobs. There is never any good time to lose a job. Now it remains an unfortunate time to lose a job because the world is not only up against the Covid19 pandemic but it is also going through a predicted global economic slowdown. Every day it converts into a recession and a possible major crash.
Major stock markets across the world lost a considerable amount of volume and investors noticed their investments drop through the floor in the last few months. On top of this, the supply chain disruption causes many businesses to downsize or shut down altogether with no end of the pandemic and recession in sight.
In such a situation, if one ends up losing their job then management of personal finances becomes even more important. So we need to manage our budget.
Read More: How to make a realistic budget and stick to it
1. File For Unemployment
The first thing that you need to do after losing your job is to file for unemployment. If you lost your job because of the ongoing crisis then you should apply for the Jobseeker payment, previously known as Newstart allowance. Under this welfare scheme, you will be paid fortnightly allowance. You can apply online through your MyGov account, for more details please visit the website.
Doing this will at least give you a financial cushion, it will not be like having a regular job but it will at least get you through the crisis.
2. Contact Your Mortgage Company
Manage your budget when losing your job and contact your mortgage company. If you live in a mortgaged home, then this is probably the second thing you must do. Call your Mortgage Company or bank and explain to them your situation and ask them to defer your mortgage payments. This helps to manage your budget. Major Australian banks already announced that eligible borrowers can defer mortgage payments by up to six months. These banks include:
- ANZ
- Westpac
- Commonwealth Bank of Australia
- National Australia Bank
You will need to explain your situation to the bank and get it confirmed that your mortgage payment has been deferred. Also, no interest or penalty will be charged over it because as of now the banks are dealing on a case-by-case basis. Â So make sure you call them up right away.
If you have got credit card debt then follow the same procedure. Although the banks have not announced to defer credit card debt if you talk to your bank manager and explain your situation then you might get your credit card debt deferred or converted into smaller instalments that you can manage easily.
3. Cut Your Expenditures To Save Money
Manage your budget when losing your job by cutting expenditures. An average Australian household spends approximately $75000 annually on personal and household expenditure, this comes down to roughly $1500 per week. If you are not used to making a budget, then it is high time that you do so. Making a budget will help you point out the expenditures that you need to cut instantly to manage your finances in a better manner.
Eliminate all the expenses you do not need. Look at what the governments and businesses are doing. Only essential businesses may work, and they have retained only essential workers. You need to follow the same line of action with your expenditure. Cut all non-essential expenditures.
Take your time to see what you can live without. If you have got both cable tv and internet, then decide between the two and keep one. If you have got unlimited internet, then you can watch tv online, so drop the cable and save up on subscription fees.
Remember that an average person can save 30% in normal circumstances and you can take this savings rate up to 40% while still staying inside your comfort zone, but FIRE enthusiasts can save up to 60%. So if you are cutting your expenses, then achieving a savings rate between 40-60% should be your target.
If you want to get close to 60% savings, then you will need some lifestyle changes. Well, this is the perfect opportunity for that. If you are in an area is under complete or partial lockdown then your lifestyle has already changed. So taking your savings rate up to 40-50% should not be too difficult.
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4. Prioritise Your Expenditure After Losing Your Job
Once you have cut down all unnecessary expenditure and only left with the expenditure, you need to prioritise it. If you have got your mortgage payments deferred, then start off with food expenditure. This should be at the top of your list. Don’t be too extravagant, but do not cut back on your nutrition either. Remember, it is important to stay healthy and have a good immune system, so prioritize your food items accordingly.
Next in the order of priority should be your utility payments. Energy companies have announced to defer bills and disconnections especially for those who have lost their job. So give your utility company a call and see if you are eligible to get your bills deferred. If you are eligible, then you will get a bit more room to manage your finances.
5. Manage Your Budget and Freelance
How to manage your budget when losing your job requires some creativity as well. If you have got skills that you can offer online then try to set up freelancing gigs. As more and more businesses shut down the demand for freelance work is increasing and you may soon work almost full time from your home.
Take out some time to look for freelancing platforms and how you can advertise your skills and then try your luck at it. You will soon have an increasing income stream that may help you get through in a better manner than you were initially hoping. The key, however, is to keep trying. If you have lost a job then, yes that is understandably a heavy blow especially if you have got a lot of responsibilities. But remember that when one door closes, another one opens.
Conclusion
How to manage your budget when losing your job. If you have recently lost your job and are feeling apprehensive thinking about the future, then just follow the steps mentioned. Get yourself registered for unemployment benefits, talk to your mortgage lender, utility company and bank to defer your debts and bills. Look at your budget and cut out all unnecessary expenditures and try to look for alternate income streams that you can generate while staying at home. Remember, persistence is the key. Now is not the time to give up. Yes, the world seems to be going through a lot. But this tough time also arrived with opportunities that we must seize for a better future.
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