Going through unemployment is very common of the people having only one aim to have a decent job to survive. Waiting to get first job may be longer than the expectations. You might be fired out because of no fault. You might be terminated because of some mistake or other’s fault? There are many possibilities to lose the job unexpectedly. Whether you are waiting for the first job or you are searching the new one, the challenge is to face the unemployment period. Many people take it the worst period but smart people take it as an opportunity to test management skill. Financial management during unemployment is the most challenging task; luckily, you have many ways to tackle to it successfully.
Five Tips to Reduce Expenses during Unemployment:
- Make getting the new job at the earliest your full-time job: Never feel bad for yourself because of losing your job. Instead, put your time and efforts in finding the new job that will help you stand on your feet again. Although it is not directly related with finance management but it is worth thinking like this. Don’t start waking up late or going to sleep late. Follow the same schedule that you were or you would follow while working. Every day, prepare a list of tasks to complete like applying to jobs, searching new jobs, contacting friends for referrals, attending interviews with recruiters etc.
- Curtail all the non-essentials from monthly budget: Sit down with pen and paper to write down your monthly expenses. When you have no earning, you have to squeeze your expenses instead of exploring new ways to borrow. You need money to pay the bills for food, home, utilities, transportation etc but you don’t essentially need money to expand the wardrobe, eating out, and going to movies. To avoid borrowing, you should cut down all the non-essential expenses. Also, if you have debt, hold it with priority to feed your family.
- Take advantage of being unemployed: The very first task for you after losing the job is to contact the state’s unemployment office. Sure, it will need lot of paperwork but it is must to get unemployment benefits.
- Review the Debts to Fix Priorities: You might be paying numbers of debts organizations monthly basis but it may not be possible after losing the job. You can’t use the savings to manage repaying the loans back as you were doing so far. Using savings to support the family needs is a god tactic but you can’t totally ignore the loan paybacks. Therefore, set the riorities to pay back the debt that is costliest.
- Don’t Depend Upon Credit Cards: Getting many credit cards to have interest free period on the withdrawal amount is common tendency but it wouldn’t work if don’t have regular earning to pay the dues within interest free period. Dependency upon credit card and interest free credits for few days is not a good tendency; instead, manage the needs up to minimum. Some credit cards draw some charges at initial stage also.
Financial Tips for Unemployed:
Whatsoever financial help is being provided by the UK govt., you should avail it because it is your right. You are not alone to get the Govt.’s financial assistance; the financial support for jobless people is available in various formats; some of these are:
Job Seekers Allowance:
This financial benefit is made available to the jobless people actively seeking job; the candidate should be capable to work and must be under the State Pension age. You can’t be in full time job engagement to seek this benefit; also, you shouldn’t be working more than 16 hours per week. Income Based JSA is a means tested scheme that takes into account any income or capital you or your partner have. Contribution based JSA is a non means tested financial assistance; it is dependent on the National Insurance Contributions.
2. Housing Benefit:
Housing benefit is designed for the low income people whether or not in job. It is a means tested benefit; therefore, it takes into account the income and capital of one or both. It is made available only if you live in temporary accommodation, shelter or the supported housing. If your saving is over £16,000, you are not entitled for this benefit. The benefit may be full or part of rent.
3. Tax Benefit:
It is administered by local Council. This benefit for low income or unemployed people is designed to manage Council Tax bill in low time. This means tested benefit varies depending on your living location. It is available for the people living on rent and for house owners also. Under this benefit, your council tax bill can be reduced by 100%. To be considered, household income includes saving, pensions and partner’s income.
4. Child Benefit:
This tax free benefit for unemployed is available to help them care their child. It is made available to the people who struggle to financially support their family. The payment is made on monthly basis. It can be claimed by anyone who qualifies. You are eligible to get child benefit if you are responsible to bring up the child. Your child must be under 16 years’ old student. Child benefit continues for 20 weeks.
Improving Credit Score during Unemployment:
Unemployment benefits are structured and made available not only to help you meet out living and regular expenses but also to help you stay safe against high rate debt. Although credit score doesn’t reflect your employment status but the lenders ask about it. So here are eight tips to improve credit score during unemployment:
- Develop emergency fund when employed
- Don’t close many credit card accounts at once
- Don’t open many credit card accounts to get interest free withdrawal facility
- Contact your lenders to explain unemployment status and explore the practical paying options despite making the repayment period longer
- Pay some of monthly bills
- Prioritize the debts
- Don’t shy in getting help from relatives or friends
- Immediately apply for Govt. funds and facilities for unemployed
Unemployment is a temporary phase of life, face it as a challenge. Be committed to get the job at the earliest; so, don’t capitalize on single or two job opportunities; go on developing more opportunities to get a job at the earliest.