21 Feb Managing Debt While Unemployed – Some Tips and Tricks!
It is not easy being unemployed and in debt. Losing a job is stressful enough, but when you have payments to make every month, the situation can feel overwhelming. The bills won’t stop coming, and you have to meet everyday expenses as well. You must be trying to find a new job, but the constant worrying does not make it easier. Though things may seem hopeless right now, there is a way to manage the situation. Until you can secure a stable income, you need a proper strategy for debt management and payment. Here’s how you should go about it:
Evaluate your assets
For starters, take a look at your assets and think about whether you can use them consider all the potential sources of income that are available to you at the moment. Can you take up a part-time job or sell some of your belongings on eBay? You can even look for small gigs like babysitting jobs to make some extra cash. This will keep you afloat and make it easier for you to keep up with your monthly payments. Also, if you are not currently receiving unemployment benefits, make sure to submit an application with the U.S. Department of Labor.
Build a survival budget
Budgeting is key to achieving financial stability, and it is all the more important if you are unemployed. Of course, when you do not have a regular income, you have to live on a strict budget. Start with your living expenses, which should include food, utilities, mortgage, insurance, transportation and medical costs. The budget should outline all of your spending and where each dollar goes. You must also remove all the unnecessary expenses from the budget. Stick to the survival budget even if you get a new job. Doing so for the first few months will help you build some savings.
Identify your priorities
When living on a survival budget, you must always focus on the important and necessary things. Start by prioritizing your debts and obligations. Think about which bills you need to pay first and how many loan EMIs you have to pay every month. Payments related to secured credit accounts such as car, monthly installment loan and credit cards should take priority after your living expenses and bills. You should try and conserve money at this point. Do not try to pay off your debts early. Only focus on paying the minimum to avoid late fees and penalties.
Talk to your creditors
You would be amazed at what good negotiation can bring! Talk to your credit card provider and mortgage lender as soon as you lose employment. Do not wait until you miss a payment. They would be less likely to help you out then. Negotiating with your creditors may get you easier terms or lower monthly payments. If you have a good track record, they may even put your payments on hold for a short while. Though there is no guarantee that it will work and that the creditor will cut a deal with you, it is surely worth a try.
Managing debt and personal finances can be especially challenging when you are unemployed. However, the tips mentioned above should help you to get a handle on things.