Getting laid off is stressful, if not downright scary. Unfortunately, it’s also pretty common. Thanks to the pandemic, many Americans have dealt with the pain of being let go from their jobs.
Just because you got laid off, though, doesn’t mean you’re helpless. You can still make some financial moves that will not only help you make the transition into unemployment easier—they’ll also make sure you can get back on your feet faster.
File for Unemployment
Once you’ve been laid off, your next step should be to file for unemployment. It’s important that you do this as soon as possible. If you wait too long, you might discover that you’re no longer eligible to qualify for unemployment benefits. Fortunately, the state of Minnesota lets you file for unemployment benefits online, which makes the process a lot easier.
When you’re on unemployment, you’ll get either $740 a week or 50% of your average weekly wage, whichever is less. There’s no getting around the fact that this will be a lot less than what you were previously earning, but it will at least be money coming in.
Review Your Finances
Once you know how much money you have coming in, it’s time to take a look at your financial situation. Review all the money you have in your checking account, your savings account, and any other accounts where you keep your emergency fund. You’ll also want to review any loans you have, from your rent or mortgage to the balances on your credit cards.
Once you’ve done that, you’ll need to be honest with yourself about your situation. Prioritize your expenses, starting with the bills you will absolutely need to get paid every month, such as housing and groceries. Once you’re done with them, you’ll want to look at the rest of your expenses and figure out which ones you really need to pay and which ones you can get rid of.
Revise Your Budget
Now that you’ve reviewed your finances, it’s time to revise your budget. Your first step should be to list and total your most important expenses to make sure you can pay for them. Once you know you can pay for your necessary expenses, you can start adding in the nice-to-have expenses.
While your main goal in revising your budget is to get rid of unnecessary expenses, try to leave some money in your budget for entertainment if at all possible. Unemployment can be very stressful, and being able to do something nice for yourself can do wonders for your mental health.
Create your new budget today.
Contact Your Creditors
If you have loans you won't be able to make payments on, don’t wait until the next payment is due. Reach out to your credit union or bank customer service and explain your situation to them.
Granted, this is a step that many people don’t want to take, and it’s easy to understand why. Admitting you’re having money problems can be humiliating, even if it’s not your fault.
By reaching out, though, you can get in front of the situation before your account becomes delinquent and explain to your bank or credit union what’s going on. Most borrowers will actually want to work with you to make sure they get their money back, and they may be able to temporarily reduce your loan payments or even skip a month so you can get back on your feet financially.
Examine Your Healthcare Options
Of course, getting laid off doesn’t just mean you’re losing your income. It also means losing your benefits, especially your health insurance. Everyone knows that the cost of medical care in the United States is incredibly high, and if you have to visit the doctor’s office without the benefit of health insurance you could easily go bankrupt.
Fortunately, you are not without options. Anybody who loses their job is eligible to get temporary medical assistance under COBRA. This is a federal law which lets people who have lost a job with employer-provided healthcare continue with the same coverage for the next 18 months, provided they can pay the premium for the insurance, which can easily cost thousands of dollars each month.
Minnesotans, though, have access to MNSure, which will help you select a private health care plan. You can look through different types of plans, then compare plan benefits and prices to find the health insurance plan that best fits your needs. You should also know that if you meet the qualifications for low-income assistance you may be able to get help through Medicaid or MinnesotaCare.
Prepare for Life-Changing Events With First Alliance Credit Union
There’s no getting around the fact that getting laid off is traumatic. However, you’re not helpless. In addition to filing for unemployment, you can review your finances and adjust your budget to make sure you can afford the necessities, work with your bank or credit union to make sure your loan doesn’t become delinquent and make sure that you have a health insurance policy just in case.
You can also prepare for life-changing events like getting laid off when you become a member of First
Alliance Credit Union. You can build an emergency fund that will help you get through hard times by getting a portion of your Direct Deposit sent to a traditional savings account, monitor your fund’s growth through your online bank account or mobile app and get the money whenever you need it by using one of our Advisor Supported Kiosks.
