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How to Manage Your Finances After Job Loss

For most people, dealing with a job loss can be a huge shock to the system. Your financial security loosens, you might have trouble maintaining your lifestyle, and you could even start to struggle to pay your bills. And you don’t always have advance warning. Maybe your job and financial stability feel totally secure, but a job loss can come out of nowhere, leaving you with a loss of income and feelings of uncertainty.

When something like this happens, it can be easy to get stuck with a sense of denial, especially if it comes out of the blue. And this sense of denial can lead to even more trouble. It’s one thing to feel a little uncomfortable telling your friends and family that you’ve lost your job, but when your denial stops you from making some hard but necessary choices, like selling an asset or changing your spending habits, you can start to run into problems.

While job loss and income loss can be hard to deal with, it may be manageable if you face it head on and take the right measures. And it helps to be prepared in advance, just in case.

So, if you think there’s a chance you may experience a job loss in the near future, or if you just want to have a sense of security, it’s time to get started. We’re going to go over a list of things you can do in the event that you lose your job, and some things that may help down the road if circumstances take a turn for the worse.

1. Track Your Expenses and Assess Your Budget

The first step in this process is to make sure you start tracking your expenses with a personal budget. In fact, it’s a good idea to have a well-oiled budget whether you’ve lost your job or not, but don’t panic if you don’t. It’s never too late to start, and putting one together after you’ve lost your job is as good a time as any.

Keeping track of your expenses can give you a better insight into your financial situation and can also help you to put together a plan moving forward. You can assess how much you have in your savings, how long it may last, and incorporate things like any sort of severance package you may receive into your future plans. If your savings are low and you don’t have an emergency fund in place, a budget can help you figure out how much money you’ll need in case you run into a financial emergency.

person calculating their budget to handle job loss

Tracking your expenses is important when you’re trying to put together a budget, and once you’ve put one together, you can start to eliminate some of your less-than-essential expenses. You’ll likely need to make some changes in your life, and if your budget can highlight your discretionary and necessary expenses, it can make the process of making these life changes a little easier.

What if You Don’t Have a Budget?

Like we mentioned before, it’s not a given that everyone works within the confines of a budget, but if you’ve experienced job loss or want to plan against the possibility, it’ll be important to have one. So, what should your budget include? Let’s take a look at a few essentials.

Rent or Mortgage Payments

This will likely be one of your top priorities when it comes to the important expenses in your life. After all, everyone needs a roof over their head.

If you’re currently renting your place and are able to end your lease, see if you can move in with any family members. If not, you may want to look for a less expensive living space. Only go this route if it makes financial sense. You may have to pay a substantial price to end your lease early, and moving isn’t cheap, so if these costs offset the benefits of moving, it may not be the best move.

If you’re paying off your mortgage, you’ll need to do your best to find a way to keep paying it off. If you don’t think you’ll have the money to do this and you want to sell your house, get this process started as soon as possible. It can take some time to actually find a buyer, and if you’re in dire need, you may not have too much time to spare.


Food is another thing that’ll likely be at the top of your priority list after a job loss. At this point, you really shouldn’t be eating out, so if you already have a budget, you may want to allot a bit more money to groceries and cut out whatever you would typically spend on eating out. Either way, food is going to be an important area of your new or revised budget after income loss.

Put together a meal plan geared around sales at the grocery store and do some research into inexpensive meal plans for you to make at home. There are all sorts of online resources out there to help you with this. And always make sure to eat everything you have in the house. You likely won’t be in a position to waste money, and not eating everything you’ve purchased is as good as throwing money down the drain.

Utility Bills

Utility bills (and recurring expenses in general) can be a big drain on your budget, and if you’ve lost your job, this will likely be an important area to target when it comes to making cuts.

Putting together a budget should give you some clear insight into how much you’re spending on utilities, and this may help you identify areas that could be reduced.

lightbulb hanging from light fixture

Depending on the season, their may be some simple things you can do to cut back. If it’s summer and you’re looking to stay cool, use fans during the day and open your windows at night instead of cranking up the air conditioning. In the winter, wear an extra layer or two in the house instead of blasting the heat. If there are any other utility services that you think you can do without (or at least a reduced version of them), consider making some changes to those too.

2. Look into What Benefits You May Have Access To

When you lose your job, you don’t necessarily have to go through it alone. There may be federal and/or state financial assistance available which could help to keep you afloat until your next job.

These benefits could include things like cash, food stamps, and more. If you’re experiencing job loss or even a heavy reduction to your work hours, one of the first things you should do is to see what assistance you may be eligible for. Visit the federal government’s website as well as the government site of whatever state you’re in.[1]

3. Cut Unnecessary Services and Maintenance

While there are certainly luxuries that are nice to have when you can afford them, a lot of them may have to go when your income gets slashed. This could be things like yard maintenance, cleaning services, or even something like cable. While job hunting can be time consuming, you’re probably going to have some extra spare time, and you can use this time to take care of some of the work that you might have outsourced in the past. If you need any sort of repairs or maintenance done, see if you can make these repairs yourself before calling in for outside help.

You may also want to consider going over all your subscription services and reviewing what you need and don’t need. While things like Netflix and Hulu can be a cheaper alternative to traditional cable, you probably don’t need more than one streaming service if you’re looking to save money.  

If you need more help with cutting costs and budgeting, take a look at these simple tips to help you save money.

4. Look for Extra Sources of Income

If you’ve got a budding talent or expertise that you’d like to monetize, a side hustle is a great way of earning some extra income. It might be easier to double down on this venture if it’s underway before you lose your job, but either way it’s never too late to start.

If you’ve already been doing something like delivering food for a delivery service, maybe you can tack on a few extra hours each week. Same goes for if you’re driving for a service like Lyft or Uber.

person driving for rideshare service to supplement income job loss

Or maybe you’ve started an online store of some sort, and now you can spend more time working on that. Whatever it is, now is the time to sink some more hours into it.

If you’re looking for more inspiration, here are some potential ideas:

  • If you have any technical skills like graphic design or writing, you could start freelancing.
  • If you own your home and have an extra bedroom, rent it out.
  • Pick up some shifts at a retailer. These jobs often don’t require a ton of experience to get hired.
  • Leverage apps that provide services for other people, like dog-walking or lawn mowing.

You can Recover from Job Loss

Job loss and income loss in general are tough blows to take, but if you prepare for the possibility in advance, or at least implement the right tactics when the time comes, there may be a path to recovery. Consider the tips we’ve gone over in this article, and remember that the earlier you prepare for the worst, the better you may fare if things go wrong.

If you do end up losing your main source of income, you may become totally reliant on your side hustle and/or government assistance to help you handle an emergency expense. If you need some extra funds to help you cover it, you may want to consider applying for a personal installment loan.

They can help bridge the gap in times of emergency and ease the burden of an emergency expense. For more information on online personal loans, visit MoneyKey and see if there’s an option that makes sense for your situation.




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