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With all the commotion going on with the government shutdown, we’d like to take some time to give some unsolicited financial advice for the furloughed workers that were sent home. This, once again, is a testament of how fragile our comfortable lives are. Even government employees can be sent home without pay and the same is true for private employees.
So what can you do if this happens to you? It is difficult to be financially underwater and unemployed but sometimes, things happen that will drive you under. How can you survive such an event in your life?
5 financial tips to help those temporarily laid off
If you are one of the furloughed government employees, we have a list of financial advice that we hope can help you during this tough financial time.
Review your savings. This is the first thing that you should do. Try to see how much money you have and how long it will last you. You will be relying on this savings to finance the needs of your family while you are not working. It is important that you try to stretch this as long as possible because you are not really sure how long you will be out of work.
Create a frugal budget. If you know how much money you have, it is time for you to create a frugal budget. This is something that will allow you to stretch the money that you have for as long as it is possible. Your frugal budget means you will be spending only on the bare basic necessities. And even those expenses will be filtered to see which you can do on your own so you spend even less money on it.
Know your benefits. Another financial advice that is important is to know your benefits. You can find out what assistance you can get through the Benefits.com website. If you are unemployed, we suggest that you look into the Employment/Career development assistance page or the Living assistance page. See if you qualify for these benefits and get help from the government. The help usually comes in financial form or if you require food assistance, some give out groceries too. If you can get these for free, then you can use your savings on something else.
Be mindful of every expense. If you are spending your savings, be very careful where you spend it on - even for the most basic of necessities. For instance, if you use bread, instead of buying it, why not make it from scratch? It usually comes out cheaper. And if you have a garden, you can try growing your own produce.
Look for other sources of income. The last financial advice is to find a way to earn money. While cutting back on expenses is good, it will only sustain you for a limited time. But if you find another source of income, then that can support some of your expenses. Anything is possible when you want to earn more. You can get an online job and get paid for projects you accomplish. This can even be for people who live in different countries. If you have an extra room, have it rented for the additional income. You can do as much as you can to add to your savings so you do not exhaust it before you can be reinstated - or until you find another stable job.
What to do if you have debts and you lose your work?
One of the biggest dilemmas of people who got laid off is their debts. If you have some debts to your name, that will bring you additional worries. You need a budget and action plan to help pay off your debts with very limited resources. Here are some additional financial advice that is specific for your debt problems.
Call your creditors immediately. If you get wind that you will be furloughed, call your creditors and lenders immediately. Tell them of the situation even before you have to default because of lack of funds. You can ask them to suspend your account so you will not be given late penalties. This cannot stop the interest from accruing though. If it is a more permanent unemployment, you may want to negotiate with your creditors for a payment plan that you can afford.
Research your debt relief options. Whether you need a simple debt consolidation or debt reduction, you need to find out all the options that you have. This is to help you make a smart choice when it comes to your payment options. If you are already going through a debt relief program, you may want to change it. If you are going through debt consolidation, you may be better off switching to debt settlement to help you get a debt reduction.
Stop acquiring more debts. Of course, part of your efforts is to stop accumulating more debts. Although it may be tempting to use your credit cards to purchase food and groceries - try to curb that temptation. Look for food benefits that will help give your family the nutrition that they need without putting you in debt for it.
This is probably a tough time for you and some financial advice will really get through. Just make sure that you will always be smart about your financial decisions from now on. And while you want to wallow in self-pity and despair - don’t. Your family needs you to come up with a way to get back your job.