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How to Handle Financial Issues That Come After Unemployment

Posted by MoneyKey on June 13, 2019
looking for a new job because of financial issues

Whether you see it coming or not, getting fired or laid off can happen to the best of us. While some people may have the savings to get them through a period of unemployment between jobs, not everyone is in this position. With four in ten Americans not being able to afford a $400 unexpected expense, there’s likely a big chunk of the population that may find themselves with some serious financial issues if they have to go without a paycheck even for a short period of time. Even when you have the opportunity to receive unemployment benefits, that may not be enough if you’re already living paycheck to paycheck.

Aside from the financial issues you might be dealing with, there are also emotional implications when it comes to being unemployed. Being laid off can be discouraging, and it can take a serious toll on someone’s psyche. But once you do manage to get back on your feet and find another job, there are things you can do to start getting out of debt, put yourself in a position to thrive in your new job – and maybe even get a promotion! – and start to work towards gaining financial freedom. Here are four steps you can take to get started.

Take stock of your financial issues

When you manage to finally pull yourself out of unemployment, you might be left with some financial issues that need to be taken care of. If you want to fix these, you’re going to have to start by taking a good look at your financial state. This means you’re going to have to make note of how much money you have left in your savings, if you’ve taken on any more debt in this period, and if your new income is enough to cover your household and monthly expenses.

taking stock of your financial issues

Once you’ve taken stock of your debt, you’ll need to prioritize what to start paying off first. In order to do this, you need to understand which debt and bills will affect your daily life the most. For example, if you have car payments or repairs to make and you absolutely need your car to get to your new job, this is probably going to be one of your top priorities.

Put a plan together

Now that you have a good understanding of your financial issues and where you stand, you’ll need to start putting together an actionable plan to start the recovery process. This will include things like contributing to your savings so you can eventually cover six months of expenses, paying off your outstanding debt, and creating a new budget that reflects your new income.

If you want to have a clear understanding of your financial situation, you’re going to need to have an effective budget in place. Different budgeting techniques work well for different people, but it’s up to you to figure out what works for you. Maybe you’d want to visualize all of your monthly expenses and upcoming payments on a budget calendar, or maybe you need a budget that’s geared towards having an irregular income. It’s just a matter of finding what works for your financial situation. If you want to explore some other budgeting techniques, take a look at our Ultimate Budgeting Guide.

budget to handle financial issues

When you’re putting together your new budget, you might find that the income coming in from your new job isn’t enough to keep up with your normal expenses from your last job. While it won’t necessarily be easy, you might have to make some lifestyle adjustments and start cutting back on some of your monthly expenses. Otherwise, you may risk making your financial issues even worse.

Work hard at your new job

Like we mentioned before, there are more than just financial issues at stake when you go through a period of unemployment. No one likes to be fired, and this can take a serious toll on your self-esteem. But when you do land that next job, make sure you don’t carry this negative state into your new workplace.

Work hard to develop a reputation as someone who is willing to go above and beyond at work, do your best to maintain a high level of quality in your work. This can not only help put you in your boss’ good books and improve your chances of promotion down the line, it can also give you the confidence you need to get out of your emotional slump. Even if your new job is just a temporary stop towards something better, your hard work and positive attitude could leave to glowing reference when you do decide to move on.

Continue to network

If your financial issues start to mount and you end up taking job that pays less than your last one or something that’s outside of your normal industry, there are still things that you can be doing to back to where you were before. One of the biggest steps for you to take is keep networking in your industry to try to find a job you’ll be happy with in the long-term. Make sure you keep your LinkedIn profile up to date, join groups geared towards your industry, and connect with other alumni from your school. These school ties might give you a big leg up when it comes to getting a return call from someone about potential job openings.

network to avoid future financial issues

Outside with networking on social media, try to schedule meetings with people over lunch or coffee. While you may not be totally comfortable with putting yourself out there, these in-person meetings give you a great opportunity to make personal connections with people in your network, and might put you at the top of their mind when a job opportunity opens up.

Focus on these steps to help deal with financial issues after unemployment

Going through a period of unemployment can lead you into some financial issues that you could probably do without. But these problems aren’t insurmountable. If you take stock of your financial situation, develop an actionable plan to improve it, work your tail off at your new job, and keep looking for opportunities to find better employment, you may be able to get your finances back on track!

While your job is obviously an important part of your existence, try not to place all of your self-worth on your employment. Getting fired can be emotionally damaging, but it doesn’t have to define who you are. If you can start to understand this, you may be able to come out of a period of unemployment with the resilience it takes to get back on your feet!

Do you have any tips for dealing with the financial issues that come with a period of unemployment? Share below!

 

Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see MoneyKey's Terms of Use.

Posted in: Financial Tips

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