When the breadwinner of the family suddenly loses his or her job, it can be difficult to adjust, but it doesn’t have to end in huge financial worries.
The first thing you must do is adjust your budget to your new reality. Less money coming in means you’ll have less money going out to pay for your everyday living expenses. Find areas where you can cut back. Below are a two important ways you can reduce your expenses immediately.
Reduce Your Living Expenses
Housing is probably your biggest expense, and that’s OK. Instead, look at your food purchases, utility bills, and personal items that you buy on a regular basis to see if you can cut back in those areas.
Grocery expenses, such as food and household items, are a big part of your budget. It also offers lots of room to reduce your expenses. For example, instead of buying brand-name grocery and personal items, make less expensive choices. Store brands and generic goods are good low-cost substitutes.
Utility bills are often overlooked, but they can make up a large part of your budget. Most electric companies have energy efficiency savings plans. These plans can help you manage and even lower your energy use so you can save money. Some programs have monthly payment schedules that can help you better manage your finances. Check with your energy company to see if they have a program that’s right for you.
Transportation is another expense that you can reduce quickly. If you can’t afford to maintain your car, you may have to use public transportation. Friends and relatives may also be able to give you a ride until your situation improves.
If you have a car loan, you may be able to ask your lender to defer your payments for a month or two if you can’t make your payments on time. This strategy may also work with your other credit accounts. Ask your lender if you qualify for a deferral based on job loss.
Paying for Insurance After Job Loss
Continuing to pay your insurance premiums after a spouse loses a job is important. Missing a payment could lead to big problems if something bad should happen and you don’t have insurance to cover it. According to HealthCare.gov, you have a couple of options: you can purchase private health insurance through the Marketplace or keep your current employer coverage through COBRA.
If you have a whole life or universal life policy that builds cash value, you may be able to use it to pay your premium. Check with your agent before you miss a payment.
When the breadwinner loses a job, it feels paralyzing, but don’t let it paralyze you: take action. Readjust your budget right away to match your current income. Job loss does not have to devastate you; you can learn to live with less if you have to.
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Filed Under: Debt
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