Right now the country is experiencing one of the fastest and most drastic increases in unemployment in our nation’s history. It is unprecedented and if you are one of the many people across the country who find themselves out of work I first want to acknowledge you and express my sincere apologies. While I do not want to take anyone’s situation lightly, I do want to lift you up by saying with encouragement that you will get through this, hold your head up high. Even though these can be dark and scary times, even the darkest of nights see a sunrise.
There is a reason the sky gets dark at night. We were not meant to see everything all the time. We were meant to REST and TRUST even in the darkness.
– Morgan Harper Nichols
So what do you do when you find yourself depending on an income that is no longer there? How do you begin to tackle a budget and what do you do to remain in control of your finances? Here are 5 steps to building a budget after a job loss.
Focus on your “4 Walls”
This season too shall pass, so much like a bear goes into hibernation, be a lean, mean expense tracking machine. Make sure that you first and foremost pluck out all the non-necessities out of your monthly budget. If you don’t have a budget at all, don’t worry you can learn more about building a budget right here on our blog. The 4 walls are the primary needs that you must have in order to “keep the lights on”. These are: food, utilities, shelter and transportation. Budget for these things and get rid of all the other fluff.
Pause any extra debt payments for now
If you follow me or Dave Ramsey you know attacking debt is at the core of becoming financially free. And while it is one of the most vital things in your budget, especially to prepare for times like this (imagine if you were debt free and going through a job loss - not as big of a blow right?), put it on the backburner. When you recover your income you can reclaim your debt snowball, for now don’t stress about the extras.
Cut out the unnecessary expenses and be extremely diligent.
"Life can be beautiful. It doesn't have to be expensive."
- Christine Louise Hohlbaum
I know we all have stories from some point in our lives where we look back and are amazed at how frugal we were, and how great it was. Take this opportunity to get extremely frugal and be diligent with your budget and your finances. Entertainment and restaurants are line items that can easily be trimmed for most of us. Make more meals at home. Explore simple sheet pan recipes, with just the food you have in your pantry. Make your own experiences. Instead of a trip to the movie theater, set your laptop up outside and watch a movie in the backyard with the string lights on. Practice really does make perfect, use this opportunity to get extremely good at being able to be diligent with your finances.
Only use emergency funds as a last resort - you got this!
If you have been fortunate enough to have saved up an emergency fund this situation you find yourself in is the very reason why that fund exists. However, proceed with caution. Only use it if you absolutely must. I know that’s easier said than done if you income just went to zero, so after you have gotten your budget and habits in order from the steps above, now work on building up temporary income sources. Anything you can do, sell old items in the garage, sign up to be an Uber or Lyft driver, file for unemployment. You need to create a bridge to take you across this time of uncertainty while you are searching for and land your next long-term, stable job.
Reassure yourself that this is temporary
"Never let the defeat of the past rob you of the success of your future."
- Ray Comfort.
This is temporary, you have been knocked down but not out. Don’t allow yourself to be swallowed up by the stress and grief of this moment but set your gaze forward and come out of this a better, wiser, more diligent steward of your finances.