Have you lost your job?
You are not alone.
Recently, more than 3 million workers applied for unemployment. While being in this position is tough, there are some helpful things you can do to tweak your budget when you’re suddenly out of work. Take a look.
First, apply for unemployment
Unemployment can offer you funds to help pay your bills while you look for work. The amount you receive will depend on where you live and your salary. But with the new stimulus package that was recently signed into law, you may see a bump of $600 a week added to your benefit payout for up to four months.
Calculate your benefits
For example, determine how much you’ll receive in unemployment benefits. You may also qualify for SNAP and get food assistance. You can also check out AuntBertha.com to find free or low-cost services that can help. Once you have those numbers or the estimates, you can better determine your budget.
List out all of your expenses
Go through your bank account and review your expenses for the last 60 days. For the purpose of this exercise, printing out statements is helpful. Next to each purchase, you can write whether it’s “essential” or “not essential”.
Once you’ve gone through all of your expenses, write on a separate piece of paper all of the essential expenses. These are typically housing, transportation, groceries, and insurance. That should be your main budget right now.
If possible, you can look at your non-essentials and maybe keep a few things, like a coffee run once a week. But, in general, you’ll want to stick to the essentials. Lastly, add up the cost of all of your essentials. This will be your bare-bones budget that includes all of the things you need to live.
Look at your money sources
Although you may not have a traditional income at this time, you still want to do an inventory of all of your money sources. Check how much money you have in the following areas:
- Checking account
- Savings account
- Investment accounts
- Unemployment check
- Tenant rent
- Any side gig income (such as babysitting or Instacart)
From there, compare your money sources with your bare-bones budget. How far can your money take you right now?
While tweaking your budget, see if you can lower your payments. There may be some mortgage and rent relief on the way, although this will likely vary by state.
Some credit card companies may also work with you during this time. And, the recent coronavirus stimulus bill just put federal student loan payments on pause for six months until September 30. Unfortunately, this doesn’t include private student loans.
With a few calls, you may be able to put other payments on hold as well. So, don’t be afraid to pick up the phone and contact your lender or loan servicer.
Tweak your budget
A budget is a way to direct your money where you want it to go. So, set a specific dollar amount next to each expense. The goal is to stick to those dollar amounts each month. Obviously, some essential expenses may be the same every month. But if you include some non-essentials, be sure to budget a number that you can afford like $20 for Starbucks.
Once you have a dollar amount for each expense for the month, your budget is ready. You can even keep track of that budget through online apps like Mint or Tiller. Or, you can keep everything written down. Regardless of whether you use paper or an app, the key is to track your spending.
How to move forward
The current economic climate has thrown all of us for a loop. So, don’t feel bad or guilty if you’re out of work. The best you can do is adjust your budget, take advantage of unemployment benefits, and lower your expenses where possible. On top of that, you can see about doing side gigs or even selling stuff you don’t need. And know this: We’re in this together and eventually, things will change.