There is nothing as financially unsettling as unemployment. Just when a family is used to having a higher income, it is scaled back and spending must be adjusted accordingly. There is also the issue of having to find a new job.
Below are five recommendations to consider:
¨ Reach Out for Help- Take advantage of available benefits and services such as state unemployment assistance, college and university career counseling offices, non-profit agency job training programs, and support groups for unemployed persons. Set aside about 30 percent of unemployment benefits for estimated federal and/or state income tax payments.
¨ Save a Surplus- Try to save at least 3 months expenses and reduce household debt and discretionary spending if you sense a PCS or job layoff coming or have time until an announced downsizing takes effect. Learning to live on less income when you still have an income will make it easier to live without it later on.
¨ Live on Less- Consider lifestyle adjustments, such as selling a second car or other valuable property and trimming household expenses. There is no “right” way to do this. Some families prefer to trim a number of small expenses (e.g., coffee) while others focus on large recurring ones (e.g., cable bill and mortgage).
¨ Build a Back-Up Fund- Apply for a home equity line of credit (HELOC) while both spouses are still employed, to have in case you need it. The cost to apply should be nominal and there is no cost unless funds are actually borrowed. In addition, the interest rate will be lower than most credit cards.
¨ Take Care of Your Health– Set up health care appointments while coverage is still available, if a soon-to-be unemployed spouse’s job provides benefits such as medical and dental coverage.