The spread of coronavirus, which causes the disease COVID-19, is creating an unprecedented unemployment situation. In some states, nonessential businesses have been ordered to cease operations, and workers across the country are losing their jobs and income.
If you suspect a layoff is imminent, it’s important to prepare for that possibility while you still have an income. Losing a job is scary and stressful, but you can mitigate the damage by taking as much control of the situation as possible now.
Slash your budget
Your first step should be to examine your expenses and look for any nonessential spending you can cut right now.
Establish the expenses you need to live and focus on cutting spending.” Obviously, you have to keep the lights on and feed your family. But you should aim to pause any discretionary spending you can.
Prioritize your bills
If you lose your job, you may have to make some tough decisions about which bills actually do get paid.
So once your budget is pared down, take a look at the expenses you have left and decide which ones are most important to continue paying if money gets tight.
Next, you should call your service providers (cell phone, internet, cable, etc.) and find out what sort of options you have to reduce or pause your payments temporarily.
Beyond that, you want to protect your credit for the future, so try to keep credit expenses low, and pay your minimum debt payments so you don’t default.
Deal with your debt.
Speaking of debt, this is an area of your budget where you may be able to find temporary relief in light of the coronavirus pandemic. Many local governments and individual financial institutions have placed moratoriums on late fees, interest and other penalties for missing payments. In some cases, you may also be able to put your loan into forbearance.
Funnel extra cash to your emergency fund
Saving money might be out of the question right now, especially if your hours have been cut. But if you have any savings from reducing spending and lowering loan payments, try to squirrel it away into an emergency fund. If you do end up getting laid off, you’ll probably need some cash to float you until unemployment benefits kick in or you find a new job.
Find a side hustle or ramp up the one you have
Because the working world is changing in the face of coronavirus challenges and becoming more competitive, it may be some time before you’re able to secure full-time income again. “One of the best ways to prepare for losing your job is to start a side-gig that allows you to replace the income that you may soon lose due to an impending job loss
