The following is a guest post.
There is nothing fun about finding yourself suddenly unemployed. You may initially panic and worry about how you’ll make ends meet each month. Sure, you’re probably eligible for unemployment compensation after a lay off. But oftentimes, this isn’t enough to cover all your monthly expenses. A savings account can keep your head above water until you find new employment. However, the thought of draining your savings may add to your worries.
Because it can take several months to land a new paying gig, you need to be smart with your money. Here are five tips to reduce your household bills and survive temporary unemployment.
Call your mortgage company
If you can no longer afford your home mortgage loan, call your mortgage company immediately. Falling behind on your payments can trigger a foreclosure and a damaged credit score. But if you explain your situation early, your home loan company may work with you to avoid a foreclosure. Several provisions are available, such as mortgage modification and mortgage forbearance. A modification reduces your interest rate and payment amount, whereas a forbearance can temporarily suspend payments. Both provisions provide breathing room as you get your finances on track.
Negotiate with your credit card company
Maybe it’s difficult to pay your minimum payments. Like your mortgage company, your credit card companies may offer similar provisions. Even if the company won’t suspend payments, they may reduce your interest rate to help you stay current on your monthly bills. A lower rate reduces how much you owe, which in turn reduces your minimum payments. Don’t wait until you skip or miss a payment to ask your credit card company for help. Getting a lower rate requires an excellent payment record.
Switch your energy provider
How much are you paying for energy? A high energy rate can trigger higher electricity bills, which is the last thing you need after losing your job. Depending on where you live, you may have options with regards to your energy provider. For example, people who live in Texas can visit www.texaselectricityproviders.com and compare local energy rates. Knowing your options and going with a cheaper provider can reduce how much you pay on a monthly basis.
Get rid of extra services
Reevaluate all your convenient services, such as lawn care and housekeeping. Some people try to maintain their lifestyle after a job loss. However, this isn’t the time to save face, it’s the time to cut back and keep money in the bank. Likewise, you might get rid of cable, gym memberships and other monthly subscriptions – just until you get back on your feet. Limiting your spending can stretch the money you receive in unemployment compensation.
Find free entertainment
Recreation and entertainment is healthy for the soul, but this doesn’t suggest spending outside your means. If living on a tight budget after a lay off, think of free ways to have fun. Spend the day at the park and have a picnic, or pick up the local paper and look for free concerts and events.
Surviving a lay off takes sacrifice. Bills don’t stop after you lose a job, but with quick action, you can lower some of your household expenses and keep cash in your pocket.