You worked hard to build your savings account, and fortunately, there are ways to protect your savings after a job loss. Although a savings account comes in handy during an emergency, you don't want a single emergency to drain your funds. There's no way to guarantee when you'll find new employment, but there are ways to protect your savings while you look for work.
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1. Reduce Expenses
Reducing expenses is one of the best ways to protect your savings after a job loss. As soon as you get your pink slip, start making adjustments. For example, some people have cut cable and other non-essential monthly bills to drum up extra cash. Also, you need to adopt a frugal mindset. Only buy what you need, and only shop when you have a coupon.
2. Get a Budget
If you didn't have a budget before, now’s the time to get one. You need to know what's coming in and what's going out. After a job loss, you may qualify for unemployment compensation and you may receive a severance package from your previous employer. With a budget in place, it'll be easier to stretch this money until you find regular work.
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3. Visit the Unemployment Office
It can take a couple weeks to receive an unemployment check. Therefore, you’ll need to visit your local unemployment office as soon as you lose your job. Unfortunately, not everyone qualifies for unemployment compensation, but a trip to a local office can determine eligibility. Your weekly check may be far less than your regular income – but something is better than nothing.
4. Ask to Be Compensated for Unused Vacation
If you're laid off from work, speak with your employer and ask to be compensated for unused vacation. Some employers already include this perk in a severance package, but it doesn't hurt to ask — just in case.
5. Downsize
The idea of selling your home may push you over the edge. But if you lost a high paying job, and you don't have enough income to keep up with your mortgage payment, downsizing may be the only way to protect your credit and finances. You can start by speaking with your mortgage company to see if you qualify for any provisions, such as mortgage forbearance. You can also consider other options, such as renting out your house temporarily or getting a roommate to help share the cost.
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6. Freelance
It can take several months to find regular employment. In the meantime, look into freelance opportunities or turn a hobby into a side business. You might not generate a full-time income, but you may be able to supplement your income and maintain your lifestyle until you’re offered a new position.
7. Have a Mega Sale
To protect your savings after a job loss, consider unloading a few personal items. Have a yard sale and generate extra cash for groceries or utilities for one or two months. You can also drum up cash selling old, broken gold jewelry, or other items like furniture, clothes, electronics, toys, automobiles, etc.
A savings account is a godsend during an emergency such as a job loss. But depending on how long it takes to find work, you can quickly run through your cushion. By finding ways to supplement, you can stretch your dollars and keep your head above water. What are other ways to protect your savings after a job loss?
