Yahoo Finance I Rebounded Financially After Unemployment With These 7 Money Moves
Nearly all of us have been there. Losing a job stings more than just your budget.
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“Losing your job hurts your pride and your finances,” says Scott Lieberman, founder of TouchdownMoney.com. “But it doesn’t have to be the end of the world.”
Follow in Scott’s and other financial experts’ footsteps to transform what feels like a disaster into the next phase of financial, career, and personal growth.
Wealthy people know the best money secrets. Learn how to copy them.
File for Unemployment
When you first lose a job, minimize the financial damage by filing for unemployment benefits right away. Don’t let embarrassment or shame get in the way of shoring up your finances while you figure out your next chapter.
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“It’s there for a reason,” points out Lieberman. “Some states are more generous than others with their payments, but regardless of your state’s rules, these payments can keep you afloat until you find work.”
The fewer losses you take while unemployed, the easier it is to rebound after finding your next job.
Get Your Head in the Right Place
No one wants to hire a Negative Nancy. Employers can see through a fake smile plastered on your face solely for the job interview.
“The first thing to do to rebound financially after unemployment is to get your mindset right,” recommends Sebastian Jania, owner of Ontario Property Buyers. He helps real estate investors build income on the side of their full-time jobs and has worked with many clients who found the financial rug pulled out from under them — and never want it to happen again. “When you get their mindset right, you can start to see the opportunities that are available now that you’re unemployed, and even see the gift in this experience.”
Erika Kullberg, personal finance expert and founder of Erika.com, consistently sees the power of mindset during and after unemployment. “Prioritize your mental and physical health while you’re in recovery. Unstable finances can have long-term health effects, so be sure to engage in self-care and confide in family, friends and/or counselors when feeling overwhelmed.”
Get Clear on Your Current Budget
Both during and after unemployment, Kullberg urges you to get crystal clear on your budget.
“Review where you are right now, by painting a picture of your expenditures by creating a budget. Compile a list of your income sources, fixed expenses, and discretionary spending to better understand your financial position. Rank non-discretionary expenses like housing, utilities, or groceries higher in the list, and explore trimming or completely eliminating what you can.
“In this way, you develop a better sense of where you stand and how you can manage your resources.”
Keep Your Spending Low
When you take a financial injury, Jania says the first step to recovery is simply to prevent any more bleeding.
“Assess your expenses and mentally accept that you may have to say no to a lot of one’s ‘wants’ for a period of time. By saying no to your ‘wants’, you can reduce your expenses and have a strong foundation to restart from.” said Kullberg.
Brainstorm New Ways To Generate Income
Kullberg notes that you can speed your financial recovery with creative ways to earn money, both during and after unemployment.
“Try earning additional income from a part-time job, freelance work, or by selling items around the house that are no longer of use to you. In addition to having some fun getting money to spend on the things you and your family need, you can also think about generating additional income from existing skills and hobbies.”
Who knows? You may even discover that a side hustle could grow into a new full-time business.
Network — Especially with High-Earners
“Reach out to your network,” urges Lieberman. “See if someone has an opportunity that you haven’t thought of yet. You never know who might be hiring and where you might find your next job.”
Jania expands on that point. “It helps to surround yourself with high income earners that are at the level where one would like to be. By being surrounded by the right people, you see that there are a lot of opportunities that come out of nowhere through simple conversation.”
He adds that if you haven’t taken care of your mental health, you’ll miss out. “Be mentally ready to take advantage of these opportunities that come up. Make sure to take advantage of these opportunities and make your worst time your best time.”
Rebuild Your Emergency Fund, Pay Off Debts
After finding your next job, you enter the financial recovery phase.
“Work on rebuilding your emergency fund and paying down any debt you might have accumulated,” advises Kullberg. “Try paying off any accumulated debt by consolidating high-interest debt into a lower-interest loan or credit card to reduce monthly payments and interest payments over the long term.
“Then, set aside some of your earnings each month to invest for future use.” Take advantage of employer-matching contributions to retirement accounts. Start investing proactively again rather than simply playing defense.
Final Thoughts
Losing a job can not only wreck your finances, but it can threaten your sense of identity, your confidence, your mental health, and your relationships. Don’t let it.
As you rebuild your finances, also focus on maintaining a positive mindset. Don’t get discouraged by any losses you took while searching for the next step in your career. Your net worth isn’t a straight line going up and to the right — it will dip and surge along the way.
“The road to financial recovery is a long one,” sums up Kullberg. “Stay optimistic.”
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This article originally appeared on GOBankingRates.com: I Rebounded Financially After Unemployment With These 7 Money Moves
