What would you do if you found yourself in an unthinkable situation? One of the most important things to save for is an emergency, whatever that may be to you. Maybe bad weather has created the need for unexpected home repairs, or you’ve had a death in the family. When I think of the unexpected, I think of job loss and what that would mean for us. I’ve been thinking of this more recently, as close friends are currently going through this experience, a month before their wedding, no less. Luckily, my husband and I have spent the last several months rebuilding our emergency savings after purchasing our first home, and we’re always sure to keep several months’ worth of funds stored there should anything happen. But what should you do if you find yourself in a situation similar to our friends? How prepared are you? Check out a few of these things to think about should you find yourself in the same boat…
Re-evaluate your budget. What will you absolutely need to pay for every month, and what can you do without? Downsize as much as you can until you can find a replacement income. Consider how long you can go without a job based on what you have in savings. Every penny you have counts!
Accepting loans. Chances are friends and family will be sympathetic to your situation, and they may offer to help. Money exchanges between loved ones can result in sticky situations, so be clear about the terms up-front – will this money be paid back at some point, or should it be considered a gift?
File for unemployment. While it might not be much, money is money, and a source of income will help with monthly expenses. Find out what you’re eligible for and take advantage of it!
Contact your creditors. Let them know of your situation, and ask if there’s anything they can do to accommodate. Student loans often offer forbearance for a few months, and other collectors may offer payment plans to allow you to pay slowly over time.
Don’t resort to credit cards. As tempting as it may be, avoid using credit cards to pay for anything. While it might create a short-term solution, it will only be another bill that you’ll have to pay off later down the road, and you’ll end up paying more than you spent in the first place due to interest charges.
Look at the loss as an opportunity. Yes, being unemployed is a less than ideal situation, but try to find the silver lining. Use it to set goals for yourself – find a new job that you love, that’s meaningful, that pays better, that requires less hours at the office, that is closer to home. Take charge of where your life goes from here with a positive attitude.
Have you ever found yourself in a stressful money situation similar to this? What are some things you do NOW to be better prepared for the unexpected?
