How to Survive Financially If You Lost Your Job
Job loss, especially if unexpected, is a very stressful experience. It often equates to losing your source of income and access to the medical, fringe, and other employee benefits that you used to enjoy. Unemployment also puts a strain on your finances and causes money problems. During these trying times, it’s tempting to make hasty financial decisions that lead to debt and bad credit.
However, losing your job is not the end of the world. Sometimes, it even leads you to better opportunities that uncover your true calling and greatest potential. With a strategic plan, you can survive financially while being jobless and broke.
Here’s what you should do:
1. Check if you are eligible for unemployment benefits.
The Newstart Allowance is Australia’s primary financial assistance to unemployed citizens over the age of 21. Meanwhile, unemployed young people aged 16 to 21 can benefit from the Youth Allowance (Other). Qualifying for these unemployment benefits is assessed according to your financial capacity. If the government believes that you can survive on your own without financial assistance, you won’t be approved. You will also be denied if you fail the activity tests that prove that you are actively looking for work.
Aside from financial assistance, the government can also assist you in finding employment. You will be assessed on how much help you need according to one of the four assistance streams: stream 1 if you are “work ready” and only need minimal help like job hunting, and stream 4 if you need intensive assistance.
If you qualify for these unemployment assistance programs, do not hesitate to apply.
2. Handle the separation from your employer wisely.
If you left your job unwillingly, like retirement and getting laid off or being made redundant on your job, you may be granted a severance package. This typically includes your remaining regular pay plus prorated year-end bonus and additional payments based on your months of service and unused accrued paid time offs. It may also include medical and life insurance, retirement plan, stock options, and assistance in finding for new employment.
Before signing any release or indemnity agreement after being offered a severance package, take the time to review the documents carefully. If you are not unsure about the coverage of your employee benefits, check your employee handbook. Make sure that you are granted all the benefits you are entitled to enjoy as a departing employee.
On the other hand, if you left your job on bad terms like being unfairly dismissed, consult with an attorney general about the benefits you are entitled to have and how you can claim them.
3. Spend your available finances wisely.
Determine how much money you have and how long it will last. Do you have any savings in the bank or other sources of income that you can use for daily expenses? Do you know how long these financial resources will last until you can find work?
Create a budget strategy that will help you allocate funds wisely and cut down your expenses so you can make your available money last longer. Do not deplete your savings as much as possible.
Always prioritise your bills payment, especially for those that have a regular billing period like utility bills. For debts, pay first those that charge for late payments like credit cards. If you can’t afford to pay your balance in full, try at least to make the minimum payment to avoid going past due on your debts.
4. Get odd jobs and look for ways to make extra cash.
While you are actively looking for a new job that suits your skills and experience or waiting for scheduled job interviews, get odd jobs to make ends meet. Clean houses, mow lawns, fix nanny your colleague’s kids, or walk your neighbour’s dog if you need to. All these manual works give you extra cash for spending.
Aside from doing odd jobs, you can also earn money from renting your properties, if you have any. If you live alone, get a roommate or rent a part of your house. You can also rent your car or get paid for advertisements on your vehicle. Alternatively, you can send the items at your home that you do not use but are still in good condition, like clothes, kitchenware, furniture and gadgets. You do not even need to sell these items in person. Online marketplaces offer you the convenience of selling stuff and reaching out to many buyers ‘round the clock.
5. Get a Bad Credit Personal Loan.
A bad credit loan is intended for people who do not qualify for any standard consumer loans because of a bad credit profile. This can be due to a lot of factors, including having a history of loan default and late debt repayments. Sometimes, it can also be affected by joblessness, especially if the job you had was your main source of income.
This type of financing dismisses your poor credit rating in order to give you the funds you need. However, the interest rate is typically higher than the standard loans. You may also need to pledge a valuable property as collateral to secure the loan. This collateral will be seized by the lender if you can’t default on your loan.
You can use your bad credit personal loan to fund whatever personal projects you have, including using it a temporary source of money for your daily expenses. Should you get approved for one, make sure that you can afford the repayment to prevent damaging your credit profile further and hindering your approval chances for future financing.
Thus, while you are spending the money you loaned to survive financially during your unemployment time, keep yourself proactive on your job search. This is the smartest way to bounce back from joblessness and being broke.
Loans for People With Bad Credit offers to finance across Australia. Our various bad credit loan products give people a second chance at financial stability. To get the right financing for you, call us on 1300 769 384 or fill out our Bad Credit Loan Pre-Approval form.
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