How to pay your bills if you've lost your job
Paying your bills after you are laid off
Covering your expenses while you are out of work can be tough. That is why we have put together a guide on how to manage this difficult time for you and your family.
When bills start piling up, and you do not have an income, it can be stressful. No matter your situation your creditors will still want their payments. Sometimes you just don’t have the money to make your payments. When this happens, you can negotiate directly with the companies you owe money to, or you can tap into other available resources.
Paying bills when you are out of work
When you lose your job, or your hours have been cut back there are the steps you should follow to make your situation easier:
- Reach out proactively
Even though creditors and companies want their money, it is common practice for them to accept late payments. If you are proactive and reach out to them to communicate your situation most of them will negotiate with you.
- Unemployment filing
If you are laid-off, you can qualify for unemployment benefits. Depending on what state you live in, you could still receive benefits even if you are still working part-time or if your hours have been reduced.
- Help from your employer
After laying employees off, many companies offer some sort of assistance beyond severance. Check with your HR to see if yours does.
- Promotional credit card
Although this might seem counter-intuitive, applying for a new credit card is a useful idea. Many cards offer 0% promotional interest for a specific period. You can use this to buy groceries and other essentials, interest-free!
- Credit line
A line of credit is like a loan except it is not a lump sum you receive and must payback. It is a revolving fund you can use and pay-off continually. If your bank offers these and you qualify, it is a great system to use in order to make sure that you can pay bills. They also have lower rates than most credit cards.
- Apply for a grant
Due to the crisis going on across the country, many states and local municipalities are offering grants for those affected. These may be helpful for you to look into.
How to keep your financial obligations
Staying on top of your finances is critical when times are tough. With so many different bills and payments due to all the time, you need to have a strategy of how to manage it all.
1. Unemployment benefits
File for unemployment as soon as you are laid off. There is no reason not to. It can help save you from enduring financial struggles if you qualify. Each state is different when it comes to what unemployment assistance is offered so be sure to see what is available for you!
2. Know exactly how much money you have
If you have saved money or set aside funds for a situation like this, now would be the time to use it. If you own stocks or investments, it would also be smart to try and sell them to get cash. You need to see how long the money you have in the bank will last you if you are out of work for an extended period of time.
3. Separate needs from wants
Part of knowing how long your money will last is deciding what to spend money and what not to spend money on. Essential items you need to pay for first would include groceries, utilities, and your mortgage. These expenses should be prioritized. In a worst-case scenario, there are usually minimum payments due on things like your credit card statement. Always pay the minimum payment if you can.
5. Plan your budget
You might already have a monthly budget planned out and know how many expenses you have. If not sit down and write out all of the regular monthly expenses, you need to account for. This enables you to calculate how many months you can go in your current situation. This is also an effective way to show what items are essential and which ones are not.
6. Cut back on everything
After you create your budget, you can separate your essential spending items, and plan to remove everything else. This would be items like gym memberships or streaming services like Hulu. These are not essential, and the accounts can easily be canceled. You might miss them, but it is more important to be able to put food on the table every week.
8. Find your next job ASAP
Although losing your job can be very disheartening it is important to remember that there are always numerous job opportunities out there. However, that does not mean your next job is going to fall into your lap. Plan to do all you can to put yourself out there and find a job opening. You can reach out to individuals in your network and former colleagues to see if they know of any jobs that you would be suited for. Reach out every way you can! You should also update your resume and be ready to jump on any opportunity that emerges. Employment agencies are also an option if you want to try a professional placement service.
Beyond finding your next full-time job, you should also be looking for short-term jobs that can help bring in money. Whether it is mowing lawns, waiting tables, doing odd jobs, or even online freelancing, there are many ways to make short-term money. Giving yourself the ability to pay off your bills and debts on-time is the goal and anything you can do to make that happen is something you should pursue.
Bottom line
Many Americans have lost their jobs in recent months so know that you are not alone in this. It can be a difficult time but if you do everything that you can, you may be able to emerge unscathed financially. The more you are in control of your spending and your finances the better your situation will be.