How To Budget If You Get Laid Off During The Coronavirus Crisis

With the Coronavirus crisis affecting pretty much every business in America, many of us are wondering if we’ll still have our jobs tomorrow. Instead of letting uncertainty take over our lives, let’s take a proactive stand by learning how to budget if you get laid off.

Many people believe that if you lose your job, there is no point in budgeting. However, the contrary is true. When you get laid off, it’s even more critical to track expenses and understand your unemployment benefits. The goal is to try to make ends meet while preserving the money that you may receive or the funds in your emergency savings account.

Coronavirus Layoffs Help

If you end up losing your job due to the Coronavirus crisis, make sure that you file for unemployment benefits right away. Also, find out about the financial relief programs that your local government may have put in place. Many have ordered utility companies to continue to provide service even if you are not current on your bills. Others have ordered a halt on foreclosures, and many banks are willing to work with clients who cannot pay their mortgages.

You will need to take advantage of all the available help to prevent a financial crisis in your household. And unlike during the 2008 Recession, both the Federal and State governments are taking many steps to help Americans endure this crisis.

Five Steps To Budget If You Get Laid Off

1.- Cover Your Essential Expenses First

The most important thing that you need to understand if you get laid off is how much does it cost you to survive each month. Is it $1,500, $2,000, or $3,000? You need to know what that number is.

Your essential expenses are:

Your rent or mortgage
Utilities like water, gas, electricity, and internet
Groceries and medicine
Gas, insurance, and transportation expenses

IF YOU ARE NOT BUDGETING AND YOU GET LAID OFF, YOU NEED TO IMMEDIATELY FIGURE OUT YOUR COST OF LIVING AND NEW INCOME.

Any other expense is nonessential. Use the money that you will have coming in from unemployment benefits or from your emergency savings to take care of those necessities.

Contact your utility companies to find out what options you may have to postpone payments. Also, don’t panic if you feel like you won’t be able to pay the mortgage and feed your family with your reduced income. Many banks have announced that they will work with clients and small businesses experiencing hardship.

2.- Reduce Or Eliminate Expenses

If you lose your job, you should reduce or eliminate expenses right away. Don’t rely on credit card debt to keep up the same lifestyle. Getting into more debt will make things worst. Instead, look at your bills and get rid of expenses like cable, gym memberships, shopping for clothes, eating out, and spending money on entertainment activities.

With the closures of restaurants and the suspension of public gatherings because of Coronavirus, we have had no choice but to stop going places and spending money. Staying at home will inevitably help you to save. However, in any financial crisis, you need to eliminate spending money on restaurants and entertainment right away, and instead save money by buying groceries and cooking at home.

3.- Contact Your Creditors

If you are in debt, try to stay current. Make the minimum payments on your car, credit cards, and personal loans. It is not the time to pay extra on your debt. You need to preserve your money. If you feel like you won’t have enough money to stay current on your monthly debt payments, contact your creditors right away. Let them know what your situation is and ask what options they have for clients facing hardships due to Coronavirus.

IF YOU GET LAID OFF DON'T WAIT UNTIL YOU FALL BEHIND ON PAYMENTS TO CONTACT YOUR CREDITORS, DO IT RIGHT AWAY! — IF YOU GET LAID OFF DON’T WAIT UNTIL YOU FALL BEHIND ON PAYMENTS TO CONTACT YOUR CREDITORS, DO IT RIGHT AWAY!

If you owe money on student loans, you can take advantage of the suspension of federal student loan payments for 60 days. This opportunity alone will help many individuals and families stay afloat during this time of financial uncertainty. However, according to the U.S. Department of Education, to request forbearance, you need to take action and call your loan servicer by phone or online. So, be proactive!

4.- Produce Extra Income

While you are trying to figure out if you can get your job back, or if you need to find a new one, take charge and produce extra income on your own. What can you sell today, or what service can you offer to earn extra income?

You can mow lawns, sell stuff online, and look for freelance work opportunities in places like UpWork.com and Freelancer.com and still practice social distancing.

Even though many businesses have shut down due to Coronavirus, many others are hiring. Companies like Walmart, Amazon, grocery delivery services, and pizza chains are adding thousands of workers. I understand that this may not be your next dream job. However, anything you can do now to make money right away will minimize the financial impact of a job loss while things get back to normal.

5.- Stop Your Debt Snowball

I never thought that these words would ever come out of my mouth, but you should stop your debt snowball as well. We are in the midst of a health and financial crisis in America and the world. The last thing that you should be concerned about is making extra payments on your debt.

I am a huge supporter and advocate for becoming 100% debt-free as soon as possible. Having no debt is the only way to become recession-proof. I learned this lesson the hard way back in 2008 when we had to survive unemployment after my husband got laid off due to the Recession. We, like most Americans, had all kinds of debt: credit cards, two car loans, student loans, and of course, a mortgage. It was hell trying to get by.

When our income finally recovered, I swore that I would never be in that situation again. So we started plowing through debt. Today I only have to worry about making the mortgage payment. Not having credit card debt or car loans has significantly reduced our cost of living.

I encourage you to move towards debt-free living. However, while we are dealing with the ripple effects of the Coronavirus, I recommend that you stop paying extra on your debt and instead preserve your cash in the bank. When things get back to normal, you can use that cash that you may have saved to jump-start your journey to financial freedom again.

In Conclusion: How To Budget If You Get Laid Off During The Coronavirus Crisis

It is critical to understand exactly how much does it cost you to live every single month. And, if you get laid off during the Coronavirus crisis, you need to know what your essential expenses are and cover those first.

Follow these five steps to know how to budget if you get laid off:

Cover Your Essential Expenses First
Reduce Or Eliminate Expenses
Contact Your Creditors
Produce Extra Income
Stop Your Debt Snowball

Keep in mind that although you may be facing hardship, this is not 2008, so do not panic! Both Federal and State governments are implementing many measures of financial relief for individuals and families. I understand that you may be afraid of the unknown, but the only antidote against financial stress and anxiety is factual information.

Figure out exactly how much you need to live off and see if unemployment benefits will be enough to cover your necessities. Then, reduce or eliminate expenses. Contact your creditors to find out what relief options they have available. Don’t wait to get a new traditional job to start producing extra income. And finally, stop your debt snowball if you were paying extra towards debt. Now is the time to preserve your income and weather out the storm.