“Experts say you should have enough money to cover your expenses for between 3 and 9 months”
While you are employed:
First, congratulations and great job. If you’re employed and planning ahead you’ve set yourself up for long term success! Go you!
Pay yourself first. Put something away in savings every paycheck. This is your emergency fund, don’t touch it no matter how tempted you are!
Consider job loss mortgage insurance if you own a home. In some cases this is even free, often it’s very inexpensive. There are other insurance options designed to protect your income, these are more complex and often expensive. I’m not going to detail them here as they are not appropriate for many people.
Home Equity Line of Credit (HELOC) - apply for this before losing your job. (that means now) It costs you nothing if you don’t use it. It can be a lifeline if you do need it. If you don’t have friends and family in a position to assist this may be your best option.
If you’ve already lost your job:
Don’t panic. Or yeah, panic, but use the energy to develop a plan.
Friends and Family - you may have friends and family able to help. This seems obvious but it’s important to consider. I’ll discuss ways friends and family can help you cut costs in a future post as well.
Unemployment Benefits - these vary by location but generally in the USA you can collect up to 26 weeks of Unemployment Benefits. The amount varies by program and your income level.
Retirement savings accounts - this is likely your worst option. It may be better than losing your home, it may not. In the USA you can qualify for a 401K hardship withdrawal to avoid eviction or foreclosure. You will still pay taxes and a 10% penalty on the amount you withdraw. Again, this is likely your last resort and rarely a good financial decision.
Stay positive! I'll cover evaluating your expenses in the next post.
I lost my job 1 month ago and I missed this preparation.
I'm very sorry to hear that. I hope you find something soon. If you learn any valuable lessons please share so others can learn from our mistakes. Have an upvote and some steem!
It was a retrenchment, the investors stop due to the declaration of martial law.
@juvyjabian where are you that martial law was declared? Brazil? Phillapines? I would be very interested to read more about what it occurring there and how people are managing.
Philippines
I don't remember the statistic, but a large percentage of Americans live paycheck to paycheck. God help us during the next recession when their is massive job loss. It is going to be ugly.
Something like 70% of Americans don't have over $1,000 in savings.
Blockchain technology and STEEM will hopefully lower the percentage on that statistic
This is scary. Everything I hear is that the next recession will make the 2008 recession look like child's play. I pity what will occur when this happens.
Agreed, this has been an unfortunate wake up call for me but I'll use it wisely. My plan is multiple smaller income streams instead of being dependent on a single job. The other obvious part of the plan is to save more.
I would add if you are gonna take from your 401K to just do a loan that way you avoid the 10% penalty on early withdraw, but you do have to pay it back with interest but it is better than paying a 10% tax. We had to do that once, and our 401K charged us 5% interest, that was paid back into our account. All in all it only cost us $25 to borrow $10K and we paid it back.
Thanks for the information. I'll investigate that as well. I have a few weeks before I lose my job but I was told If I borrowed against my 401k and lost my job the full amount would be due immediately. I'll have to research it more. Glad you were able to borrow and pay it back!
yeah we had a way to pay it back, and we were still working. So that could be a consideration
I have heard of HELOC but I was unaware of mortgage insurance. Another important strategy is to pay off debts so you won't have to deal with them. Makes tightening the belt easier after a job loss.
Good input! Yes I'll have to include that in my next segment, thanks.
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STOPIt's hard to live in today's world with increasing prices in everything it's hard to make it . Pay check to check is sometimes the only option some people have . How can someone save when their future is not even secure . @mynewsteemit
Agreed, it can be very tough to make ends meet. Maybe I can do a piece on ways to cut spending. There are lots of posts here about making extra money. My plan is to be less dependent on a single source of income.
great suggestions! Savings is always tough, but a very necessary thing to do.
good thing to do
Yeah you can never know what's going to happen, so saving money is a good idea. Everyone must have some sort of saving or else it could ruin their life one day when they really need a lot of money.
The number of people that don't prepare for job loss is insane.
Nice write-up
that's pretty helpful I like your post thanks a lot for sharing and keep on posting ;)
Advices and words of support are much appreciated at this full of uneasiness period of time!
Thanks for your concern! Great post!)
And i'd add that everyone should join steemit :d
Great
Followed , upvoted