Being made redundant or being laid off is a reality for far too many people in this unstable economy, with so many small businesses going bankrupt and so many large corporations moving their operations overseas, even the best workers who have stayed loyal and worked to their full potential are no longer safe. If you find yourself sitting in your boss’ office having that conversation on your last day at work, and you’re not lucky enough to have income protection insurance, here are five steps you need to think about immediately in order to keep yourself out of debt:
1. Speak to your family. Your family knows that these times are hard and that it’s not your fault you lost your job, so there’s no shame in telling them. This is the important first step because you all need to sit down together and take a look at your collective spending to see what areas you can immediately cut back on. Your family also needs to know that, at least for a while, things will have to change when it comes to finances.
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2. Reign in your spending. The first obvious thing that can be cut back on is luxuries like entertainment, eating out, cleaning/gardening services, cable TV and unnecessary clothes purchases. It’s also a good idea to cancel any unnecessary debt like re-thinking that new couch you had planned, or that holiday that was coming up.
3. Call your creditors and tell them. Everyone knows the economy is bad, and credit card companies and banks have systems in place to help you. It may seem like they’re against you and that they only care about getting their money, but your financial health is better for their business in the long run.
4. Apply for unemployment benefits. This takes awhile to get approved, so this needs to be done as soon as possible. You should be able to get an idea of what your benefit might be by searching on your state’s website. You’ve paid taxes for years, so there’s no shame whatsoever in taking a little bit back when you find yourself on hard times.
5. Update your CV and start looking for work. It may seem like your options are limited, but you’d be surprised how quickly it’s possible to be back working after falling on hard times. The key is to play to your strengths, it may not seem like you’ve learned much since starting your previous job, but have a sit down and think about every new skill you’ve applied since you last updated your CV. Don’t be afraid to diversify your interests and apply for jobs in areas you may not have thought yourself suitable.