Budgeting is undoubtedly more than just planning for spending money. It also includes preparing yourself for unforeseen expenses and long-term goals. As long as money is coming in, you do not bother about budgeting. What if you lose your job?
You will likely have some savings to tide you over, and you may also seek unemployment benefits. You may still feel that you do not need to care about budgeting because you can make do with little funds, but what if you take longer to land a new job?
Surviving unemployment can be challenging, especially if it has been stretched a little longer. You will likely think that you do not need budgeting when you are out of work, but you will have more of the need for budgeting.
Whether you are dipping into your savings or relying on unemployment benefits, you have little cash to get by this difficult time. It is crucial to take care of your money so you do not end up running out of money.
Budgeting tips for surviving ling term unemployment
There is no denying that it can be quite tough to make a budget and stick to it during unemployment. Here is what you should do:
- Financially prepare for unemployment beforehand
No matter how result-oriented you are, they let you go when the company has to move the furniture around. Job insecurity is always out there. You cannot be confident that your employer will not lay you off when business revenues go down, or you do something against the company either on purpose or unintentionally.
The pandemic outbreak must have taught you that sometimes companies have no other way around than making you redundant. This was the first time when people had survived a very long unemployment period. It was dreading, undoubtedly.
Some were lucky who honed their skills and landed a better job, while some had to accept work for lower wages. However, some people had to switch to other industries. This scenario reflected the dystopian picture of the world. Well, now you have understood that unemployment can catch you on the wrong foot.
This is why it is crucial to get financially ready for unemployment. You never know when you can lose your job and how long it can take you to land a new job. This is why it is suggested to be financially prepared.
You should estimate how much you spend on your essential expenses, and accordingly, you should set a limit for your monthly savings. Make sure that you place a certain amount of money to transfer to your savings so you can achieve your savings goal quickly.
You must have at least six to nine months' worth of living costs, so you can manage tide over if you are to stay out of work for such a long period.
- Take stock of your expenses
You need to keep tabs on your expenses whether you are employed or out of work. Monitoring your costs will help you know you are not overspending money and meeting your goal of creating an emergency cushion.
You also need to track your expenses when you are out of work. When you are employed, you can manage to spend on your discretionary expenses and sometimes can easily withstand overspending. Still, you cannot be so liberal with your money at the time of unemployment.
This is because you are relying on your savings and unemployment benefits. Money is not coming in, but your savings are going down. If you come across a financial emergency these days, you may need to take out unemployed bad credit loans in Ireland.
This is an additional burden on your finances because you must pay on top of what you have borrowed. Tracking your expenses is a must, so you do not end up running out of money. However, it is crucial to analyze your repaying capacity when you are borrowing money.
- Adjust your regular expenses
Even though you are just relying on your essential expenses, you should try to adjust your costs. Look at your total monthly spending, so you know how much money is going out. Then look at your monthly expenditure list to see if you can reduce your expenses.
For instance, you can buy groceries in bulk, veggies from a thrift store so that you can save money. If you have borrowed money from a direct lender in Ireland, it becomes more crucial because it makes it easier to repay the debt on time.
Apart from food, you should also consider other expenses. For instance, if you find that your utility service provider is charging more than the others, you should switch to the other provider that charges competitive prices.
Make sure that you have opted out of subscription plans of services you are not using. If you do not use a cable TV network, make sure that you are not paying for it. Try to unsubscribe from monthly magazines. Print magazines should also be avoided until you land a new job.
- Treat your savings as unemployment income
Just because you have savings of six to nine months worth of living costs, it does not mean that you will quickly dip into them.
You should carefully use your savings, so you do not run out of money down the road. You do not have an idea of how long you will have to live off your savings.
This is why you should monitor how much money you need every month and make sure that you take out that money from your savings and use that money for your regular monthly expenses.
If you keep directly dipping into your savings, you will likely end up consuming all of them much before. This is why it is recommended to take a fixed portion out of your savings.
- Have a side gig
Just because you have some savings and unemployment benefits, it does not mean that you should not bother to have a side gig. A rule of thumb says that having a side gig can actually help you tide over during financial emergencies. It can help you meet your regular expenses quickly.
Even if you have a large amount of savings, you will likely need more money because of unexpected expenses. You cannot be sure that you will be able to manage all of your regular expenses by dipping into savings. This is why it is recommended to have a side gig.
Having a side gig can also help you land your job easily because recruiters often prefer hiring candidates who were utilizing their unemployment period on other things as well.
- Understand the difference between needs and wants
You should understand the difference between needs and wants. If you do not understand the difference between these terms, you will never be able to manage your expenses. Even though you are relying on your side income and your savings, you should analyze the difference between both terms. Make sure that you control your desires.
For instance, food is a necessity; of course, you will have to spend money on groceries to prepare meals, but eating out at restaurants is not a necessity. This is a discretionary expense. There are a lot of examples.
For instance, shopping is necessary when you actually need clothes, but it is a discretionary expenditure when you buy clothes just for the sake of pleasure. Understanding the difference between needs and wants is crucial if you want to survive unemployment.
You may think that you do not need to think about your finances much as sooner or later you will land a new job, but this can help you in the long run. You may need to borrow a large amount of money down the line. Though you can fund your planned expenses with long term loans in Ireland, having savings will support you a lot.
The bottom line
Surviving unemployment can be very challenging, especially if it takes you a long time to land a job, but it is not impossible. You can easily survive it by following the tips mentioned above.
Make a budget, track your spending, and try to spend money on essential expenses. By following the tips mentioned above, you can easily ensure that you should consider.