If you’ve lost employment due to the coronavirus, the time is now to plan for this to be a long-term problem. That’s not us being negative, it’s just smart to revise your budget to be ready for anything. Then, in the case that you get another job soon, you can reshape the budget again. Better safe than sorry. Here are some ways to prepare your budget for an extended period of unemployment.
Track and Cut
The first thing you should do is calculate your expenses so you know (roughly) how long your money is going to last. Be sure to account for fixed and variable costs. Once you know what you need to have on hand, comb through your budget and cut expenses. You want to have your budget as trim as possible.
Many companies are offering relief programs to consumers impacted by the pandemic. Take advantage of these offers. Contact your mortgage and student loan lender, landlord, credit card company, utility companies and more. Essentially, you should reach out and try to find help with every bill you have. As US News suggests, you might want to contact local and state relief programs as well. As you take advantage of these offers, make sure you understand the parameters for eventual repayment.
Use Liquid Funds First
If you need to tap into savings accounts, use liquid cash first. Hopefully you have a well-stocked emergency savings plan. Use that until you have nothing left. You should avoid withdrawals from your retirement accounts if you can.
In some cases, it might be smart to consider other avenues of employment. What skills do you have that can translate to another role? While you might not want to change industries, it’s best to remain as flexible as possible until you can find a job in your field.