In a world of ever-changing circumstances, you may temporarily find yourself without work. Job loss and income uncertainty are an obvious threat to many American families as the economy evolves and automates. Some jobs that were here yesterday can simply be gone tomorrow. While that may feel like an existential defeat on the surface, there is help available to those who seek it.
Understand Your Budget
The first step to managing debt with little to no income is to take an inventory of all present bills, debts, and expenses. You need to understand fully the extent of your income and expenditures to find ways to minimize this sudden impact of income loss on your budget. Some spending cuts are easier to make than others, such as fast food, streaming services, and other discretionary items. Likewise, you can find small ways to save on important expenses like food and transportation costs. Do you need the most expensive produce on the shelf? Can you limit weekend travel to save on gas?
Making reasonable adjustments to your discretionary spending provides you more time and money to focus on other financial obligations during economic hardship. Start by creating line items of monthly expenses, and prioritize your most important expenses first.
Apply for Unemployment
Unemployment benefits are designed specifically to help those going through difficult circumstances. In many states, these benefits extend beyond weekly payments. Unemployment benefits offer free career services, such as resume building, job search assistance, and workforce training, to make you a more competitive candidate for your next interview.
In order to receive unemployment insurance, contact your state unemployment office. It is a straightforward process that requires a few points of basic information. Unemployment benefits are available to most people who experience job loss through no fault of their own. These benefits usually do not apply if you leave your job without a good reason or if you were fired for misconduct. Be sure to give the unemployment office detailed information on your circumstances to help determine your eligibility in a timely manner. Incorrect or missing information can set your application back.
Talk to Creditors
Did you know that creditors often work with their customers who experience job loss and economic hardship? While it is not a permanent solution to unemployment woes, this can be one of the biggest reliefs during a difficult time. In many cases, creditors are willing to lower payments or even suspend payments temporarily through delays or forbearance.
Usually, payments can be frozen for a set time with the expectation that you will pay the debt back in full at the end of the grace period. You can ask if those missed payments can be spread out among your normal payments at the end of the grace period so that you are not overwhelmed with a large bill when the grace period expires. Some lenders in the mortgage industry will even allow for a loan modification in which the loan terms are adjusted through loss-mitigation options. Creditors have a number of other tools at their discretion that can help you achieve a more manageable payment. Credit card interest rates, for instance, can be negotiated depending on the creditor. You can improve your chances of receiving a lower interest rate if you have a history of paying your bill on time and have a long account history with the company. Lenders value their reliable customers, and many will accommodate you with a rate reduction if you make a good case.
Talk to Your Banker
When navigating a loss of income, talk to your banker. Not only can he or she provide relief in several ways, but bankers also offer the institutional knowledge and expertise to help you plan a financial recovery.