Friday, June 25, 2021

How to Stay Financially Secure After Losing Your Job

If you have been laid off because of the COVID-19 pandemic or any other reason, coping with the sudden change can be depressing. Rethinking how to foot your bills and replenish your income will require sobriety. 

Despite the anxiety, remember the next steps you take should be strategic and reasonable to help you manage the harsh season. Below are significant financial moves you should make to stay financially secure after losing your job.

Control Your Emotions

The emotional toll of job loss can affect your mental health significantly. If you do not devise ways of renewing your sense of purpose, you may become an emotional wreck sooner than you think. 

The disadvantage of becoming emotionally and mentally drained is that you may make poor financial choices that might affect you in the long term. If you feel overwhelmed, find a bankruptcy attorney and share your issues. 

Do not rush to pull all your IRA or 401(k) money out without seeking advice from an expert. Instead, use the money you saved for emergencies to sustain yourself as you plan on the way forward.

Check Your Eligibility for Various Relief Programs and Unemployment Benefits

Cutting down your expenses after losing your job will help you a lot as you pursue other courses that could earn you some money. Usually, if you can prove that you did not resign or get fired, you may be eligible for unemployment insurance, among other unemployment benefits. 

Also, your employer may decide to give you a severance package as you go home. Should this happen, consider reviewing the contract before signing on the dotted line. If need be, involve a benefits attorney to help you understand any ambiguous information. 

Rushing to sign a legally binding agreement can be risky because you never know; the devil may be hiding in the details.

Protect Your Taxable Assets

You should act swiftly and apply for state unemployment as soon as you lose your job. Although it is taxable income, the state can defend you if your employer claims a reasonable cause. 

Also, if you withdraw your 401(k) funds, ensure you return it or take a rollover within 60 days, or else you may be penalized.

If you have a mortgage you are refinancing, try to negotiate and ask them to reduce your monthly payments. If you don’t own a home yet, talk to your landlord and negotiate fairer terms. They may consider you because finding new tenants can be tricky sometimes.

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