Losing your job can be defeating. But bills don’t care. They just keep coming. How do you deal with mounting debt when your income is no longer there?
Freedom Debt Relief shares several tips in this article to help you bridge the gap until you land your next job.
Don’t Raid Your Emergency Fund
It can be tempting to drain your emergency fund or even retirement in an effort to pay off some debt and cease at least a few monthly payments. However, this isn’t the best option. It will only lead to accumulating more debt, probably on your credit cards at a high rate of interest.
Make only the minimum payment on any debt. This will help stretch your existing dollars as far as they can go. Make use of your existing checking balance and any severance money.
Negotiate With Creditors
Immediately let creditors know of your current employment situation. Try to get your interest rates lowered.
Some lenders will not do this while you might have luck getting at least one of those terms. Freedom Debt Relief mentions that not trying isn’t an option. With no money coming in, you need to try every tactic possible to keep as much money from going out as you can.
Rework Your Budget
The budget that worked while you were earning money isn’t the same budget that will work while you’re unemployed. Things are about to get extremely tight.
Freedom Debt Relief reviews says you have to start shifting into a completely different mindset. One of survival. When you’re in survival mode, you aren’t thinking about luxury items, take out pizza, leaving lights on or buying lotto tickets.
Instead, think food, shelter and utilities. Freedom Debt Relief reviews mentions that it’s only the necessities that should be consuming any money. This also includes minimum payments to creditors, including your car note. At this point, your budget is very predictable and should be far less than when you were employed. If not, your budget needs lots more work.
Finding some way to keep up payments when you have no income can seem like mission impossible. It can be tempting to sell out and try to get a high rate payday loan. Freedom Debt Relief reviews says don’t do it. You’ll send yourself so far backwards, wishing you could take back your decision. But it will be too late.
Instead, turn to family and friends if you must borrow. Add interest to any borrowed amount to let them know you are serious about paying back the loan. Then continue your job search every day.
Freedom Debt Relief is on your side. Having monthly notes coming in without any income is definitely scary. We are here to help you find a way to navigate these troublesome waters.