Life goes without a hitch as long as you put food on the table. Stress grips you when you lose your job. Eventually, all the bills seem to be floating in the air in front of your eyes. You start worrying about getting by, and tension creeps up more fiercely when you own a family, too.
If you owe money, you cannot top payments to lenders or creditors just because you are out of work. Missing payments will result in late fees and accrued interest, worsening your situation. It seems like a sword is hanging over your head.
Well, this is something that is not in your control and, hence, should not be far from your reach. If you have lost your job for any reason, you have a number of ways to stay on top of your expenses. First off, you should review your budget. As cash has stopped coming in, you will immediately have to put a lid on your expenses. The stricter you are, the better it is. Your debt payments must be the priority.
If you do not run your budget, create the one. At this time of trouble, budget is the knight in shining armour. Understanding where your money goes will let you discover that some of your sending is not essential.
There could be some expenses you can temporarily trim down, such as cancelling the subscription from OTT platforms, choosing restaurant delivery, having food at the restaurant and the like. You can restart spending on them once you bounce back.
Here is what you will have to do in addition to restricting your budget:
- Know your rights
You must know what help is available to you and how you can access it. You should apply for unemployment benefits once you lose your job. It depends on your circumstances if you are eligible to qualify for these benefits to get by.
Your lenders may also be willing to lend you a helping hand when non-payments are the direct result of job loss. Do some online research to find out what kind of help is available. Contact your lender as well to know how they can help you in such a difficult time period.
- Do not stop paying bills
You may feel stretched while being unemployed and as a result of the fact you may stop making payments. Even though your budget does not allow you to make payments, you should never stop payments. Otherwise, you will be imposed late payment fees and accrued interest. Lenders cannot get to know about your financial situation unless you tell them. It is a must to keep your lenders or creditors in the loop about your financial situation.
Before turning to them, you should work on your budget. Try to figure out how you can release some cash by trimming down other expenses. You should talk to your creditors and lenders if you still face difficulties. Be honest about your financial situation and be ready to turn in documents to back your statements.
It would be absurd to expect to have put your payments on ice. A lender will put you on a new repayment plan until you get a new job. This plan will reduce the size of monthly payments, but interest will not stop being accrued on the outstanding balance. It shows that you will have to make larger payments as soon as you land a new job.
If you have been paying all your bills on time, you can negotiate for the best deal. Big loans such as mortgages can badly affect your finances. Ask your mortgage provider to freeze payments. In the meantime, you can manage to keep up with instalment loans for bad credit.
- Think about the debt management plan
Take advantage of your good credit score and talk to a debt management company. It will talk to your lenders and creditors and convince them to accept lower payments without adding on interest. They might even propose a debt consolidation plan to you.
- Boost your income
The desired help cannot be available from lenders or creditors, thanks to their policies of not letting go of interest. The best way to deal with this situation is to make money. Of course, you will spend some time finding a job for yourself, but the rest of the time could be utilised in doing a part-time job. Look out for jobs at retail stores like Amazon; you might get some work to earn a stipend.
Food delivery companies are always having vacancies for delivery partners. You can earn quite good money based on the number of orders you pick up and deliver. Though such gigs will not be appealing to you, you will do them until you get a new job, and there is nothing wrong if extra cash helps keep things ticking over.
- Be careful about borrowing more
Live off a lean budget. Ban your discretionary expenses unless you get back to work. If an emergency crops up, loans for people on benefits are available, but try to borrow from a friend or relative. At least you can avoid paying interest. Do not borrow for expenses that you can put off. Make all purchases through cash so you can track your outgoings.
Credit cards should be kept away to avoid overspending. If you still have to borrow money from a lender, make sure to borrow from a reliable lender like 1oneFinance, which has gained a reputation for loaning at lower interest rates than the market rates.
To wrap up
It is quite obvious you struggle with payments when you are out of work, but there are several ways to deal with this situation calmly. First off, you should restructure your budget to whittle down your expenses. Then, talk to your lenders so they can lower your payments. You can even consider help from a debt management company. Do not unnecessarily borrow money; boost your income by getting a side gig.
Jessica William operates as a Senior Consultant and Chief Content Editor for 10 years at 1Onefinance. She assists the firm in getting a grip on the new lending laws and regulations. She does so by researching the trends, consumer requirements, and new audience preferences. Jessica is responsible for making important financial and administrative decisions.
Apart from helping consumers with the best solutions, Jessica Williams helps them ensure financial stability. She analyse the business data, finances, expenses, and revenue/ income of customers and determines necessary changes. Jessica finished her Doctorate in finance and law and implements her knowledge to the best interest of the firm and customers.