It’s an economic nightmare out there, for everyone. If you’ve lost your job and the bills are piling up, you might be wondering how you can carry your family and still honor your financial commitments and payments. The best way forward requires careful planning so that you can get whatever money you have coming in to stretch as far as possible. These are the top four tips to help you avoid debt if you’ve lost your job:
- Micro Loans To Avoid Debt Relief
Microloans, also known as small loans can give you a temporary means to get by without turning to extreme measures, like debt relief. While a loan will require you to increase your debt load, it’s a short-term sacrifice in exchange for long-term relief. That is because failure to make payment and cover your bills might force you into taking debt relief. While debt relief will absolve you of the financial stress, it can damage your credit score making it more challenging to get back onto your feet.
- File For Unemployment
If you qualify for unemployment benefits, do everything in your power to claim them. Unemployment insurance contributions are submitted on your behalf by your employer. It indemnifies you, should your employment be terminated. You can claim a significant portion of your earnings for a few months if you qualify. These funds may not be a full salary, but they can certainly help to cover your essential payments. Unemployment insurance claims are your right, especially if you have spent that time working for a company that can no longer keep you on.
- Create A Payment Priority List
If you have some money coming in, even if it’s not enough, it can stretch surprisingly far if you plan how to spend it wisely. You have to create a priority list of payments. Which financial commitments are essential? Which are important? Which can be moved, canceled, or re-negotiated? It’s never easy to let go of certain comforts, like high-speed internet or mobile phone contracts, but this might be your key to survival. If going without these comforts seems too extreme, consider downgrading them instead. Speak to your mobile phone and internet providers about affordable plan options. Once you have prioritized your commitments and financial needs, divert your funds from top to bottom, seeing how far down your list, and your money can go.
- Reach Out To Your Providers
After you have prioritized your financial commitments, there will be a number of payments at the bottom of the list that have to go unpaid. You can either cancel those services, which may not always be possible – or – you can reach out to your providers. Explain your circumstances and ask for a payment break, reduced premiums, or for the option to downgrade your agreement. Most providers have plans in place for these situations because they’re more common than you’d think. Many people fall on difficult times.
The best thing to do during these uncertain times is to create a solid financial plan and stick to it. Not only will it provide you with a roadmap for financial stability, but it will also give you much-needed peace of mind knowing you have a plan in place.