Due to the economic decline in the past several years, thousands of people have lost their jobs and many more are unemployed as there are just not that many job openings out there. Unfortunately, the economy is still unstable and many people are worried about their own job status. They are wondering what they will do if they lose their jobs, how they will pay their bills and support their families. In such an unstable economic environment, there are a number of steps people can take to budget and save in case of a job loss.
Create a Monthly Budget: The first thing you can do is to assess your current financial status and create a monthly budget. It can be helpful to meet with a trained credit or debt management counsellor to help you create a budget. Such a counsellor can help you determine how much you are bringing into the home and how much is going out on expenses each month. By creating a budget, you will be able to identify areas of overspending and find ways to cut back.
Eliminate Unnecessary Expenses: You should consider cutting out spending on unnecessary expenses such as magazine subscriptions, gym membership, dining in restaurants, smoking, and other activities that may be considered a luxury. Your budget should be about paying for necessary expenses such as the mortgage, medical bills, etc.
Debt Assessment: While you are employed, it may be wise to assess your debt situation. If you find yourself in an overwhelming amount of debt with you credit card bills, vehicle lease, and personal loans, you may want to consider a debt relief program such as debt consolidation. By merging all outstanding debt into one payment paid monthly to a credit counsellor you will reduce your payments and you will have one lower interest rate.
Reduce Mortgage Payments: If you have a high mortgage payment, consider renegotiating with your lender for a lower monthly payment. You can use the savings for other monthly expenses such as your utility bill. Also, check with your utility company to see if you can reduce your monthly payments.
Supplement Income: If you think you are going to be laid off soon from your job, check to see what benefits you will be receiving such as severance. Also, plan to file for Employment Insurance as soon you are laid off.
Practice Fiscal Responsible Shopping Habits: It is important to become a smart shopper. Learn how to find deals on items you need by taking advantage of special promotions, coupons, and discounts.
More people are worried about their job status and more people are looking for jobs. In this economic environment, it is important to take measures to financially protect yourself in the event of a job loss. By cutting costs and finding ways to save money, it will make the unemployment period much less stressful for both you and your family.