The thought of not having a job or steady source of income can create panic and fear. It can take months to find employment in a bad economy. If you don't generate income soon, you may be in jeopardy of losing your home and other personal possessions. Fortunately, there are ways to survive unemployment and keep your head above water.
Claim Unemployment Beneftis
Being fired or laid off from your job may make you eligible for unemployment compensation. Visit your local employment office to inquire about eligibility and submit a claim. Use money from unemployment compensation to pay your bills while you look for full-time employment.
Spend Money Wisely
Regardless of how much cash you have in your emergency fund or how much money your prior employer paid in severance, spending your money wisely is key to surviving unemployment. Trying to maintain your old lifestyle and buying unnecessary items can quickly deplete your funds. Be smart and cut back on spending and extras such as dining out and vacations until you've regained control of your finances.
Lower Your Mortgage Payment
Losing a job can trigger other problems, such as a decrease in your credit rating when you're unable to make payments. Talking with your creditors and lenders such as your home loan provider and explaining your current work situation may compel them to reduce your monthly payments or offer a hardship forbearance, which permits you to skip a few monthly payments without consequences. Although lenders approve a mortgage forbearance, they may report the forbearance to the credit bureaus, which can damage your credit history and lower your credit score.
Be Proactive
You can't make someone give you a job. Rather than sit around feeling sorry for yourself, do something to generate income for your household. Assess your skills and talents and brainstorm ways to turn your interest into a moneymaking business. A background in or enjoyment of landscaping can serve to your benefit if you wanted to start a lawn-care business, for example. You could also open an in-home day-care center, start selling items on eBay or begin a janitorial business, as other examples.
Retirement Accounts
People often panic after losing their jobs and are quick to withdraw money from retirement accounts. Dipping into your 401k or individual retirement account, or IRA, can have expensive fees and tax consequences. Consider taking money from these accounts as a last resort. Talk with an accountant or tax professional for information on penalties and tax liabilities on withdrawals.
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