Losing your job can be a very difficult and stressful time. It is, however, vital that you take the right steps to secure your finances as soon as you become unemployed. This will prevent your finances from spinning out of control and will help you stay on top of your current and future expenses. There are some basic steps you should take right away, in order to manage your finances. Below are several things you should consider to help with your unemployment financial management.
Get a Handle on Your Current Financial Status
The first step you should take as soon as you know you are going to be unemployed is to take a look at your current financial status. Gather all of your bills and bank statements together so you can get a clear picture of your current financial situation. You want to determine how much money you have available and in your savings account. You can compare this income with the total amount of bills and other household expenses you have each month. This will help you determine how long you can survive without any additional income coming in on a regular basis.
Talk to Your Employer
If you have the opportunity, you must also speak to your employer before you last day of work. Ask your employer if you will receive a redundancy pay package. If so, make sure you get the exact details so you know how much additional money you will have coming in the future. You also want to ask about your insurance and superannuation account and how they will be handled after your employment ends.
Contact Centrelink – or the welfare provider in your country
Next, you need to contact your local Centrelink office and apply of Newstart Allowance benefits as soon as your job ends. Depending on your specific situation, you may have to wait several weeks before benefits will begin, but it is best to apply for them as soon as possible. Since your income will be significantly lower, you should also apply for other benefits to see if you are now eligible or if your current benefits can be increased. The more help you get during this timeframe, the easier your finances will be to handle.
Create Temporary Budget
Once you know what your redundancy pay package will provide and what your Centrelink payments will be, you should create a new temporary budget. Try to cut back on as many expenses as possible. Remember that this will just be a temporary budget until you are able to find another job. However, it is vital that you cut back on your spending as soon as possible because you do not know how long it will take to find a new job.
Talk to Lenders
If you get to the point where you are falling behind on some of your bills, be sure to contact your lenders, or other entities that you owe money to, as soon as, you know you are going to have a problem making a payment. The sooner you contact them, the more likely they will be to work with you and make payment arrangements that you can afford. Being proactive can help you avoid late fees and avoid utilities being shut-off.
The most important thing that you can do after you lose your job is to take action right away to take control of your finances. The longer you wait to take these steps, the further behind financially you will fall. Hopefully, you will be able to find a new job quickly, but just in case you need to be prepared. By taking these necessary steps you will be able to manage your finances until you are back to work.