Financial tips: Managing your money if you have been laid off, on a pay-cut

Millions have lost their jobs as the ongoing coronavirus pandemic continues to wreak havoc. The future remains bleak as experts still predict millions of jobs will be lost in coming weeks and months.

If you have ended up with reduced pay or jobless due to the pandemic, you may need to take appropriate action and keep your finances in check. Here are a few things you might want to consider:

Relooking your budget

No doubt if you have been laid off you will need to be ruthless with your budget for a couple months or until you figure something out.

When reviewing your budget, you need to consider the amount of money that is coming in and what is going out. Break down the basics, review your subscriptions and memberships. Find out what you can cut off temporarily and steer clear of nonessential spending.

Seeking relief from your lenders

One of the first thing you need to do immediately is to take stock of how much money you have and how much you owe your lenders. After you have taken stock of your money, you can consider approaching your lenders; bank or Sacco. While at it remember you need to be proactive, it’s better to approach them early enough before any problem arises.

Reviewing your healthcare covers

You will worry about your healthcare cost after you have been laid off if you were getting your health insurance through your employer.

You can review your paperwork from the employer when you were laid off to see if there is a cover you can consider. There are some covers that let you stay on a health insurance for up to 18 months.

Bringing your children up to speed with the situation

It might not be the easiest thing to do as a parent but it is important to let your kids know that you have lost your job and that it won’t be easy going forward.

If they are small, you can give them the basic facts. All in all, don’t hide money problems from them. Kids would rather know the truth about the hard situation than wonder why their parents are so stressed and upset.

Considering your next steps

Landing a new job can be quite challenging during the pandemic. As thus you might want to get creative about how you are going to make some money. This is the time to find something you can do part time or as a consultant as you continue your search for a full-time job.

Insourcing everything

This should not be debatable. If you have been laid off, you need to cut off all the unnecessary expenses. Since you will be home most of the time, meaning extra time on your hands, you may want to do away with your cleaning service, for instance. Clean your own house, cut your grass.

You can also consider DIY maintenance and repairs as you fix some of your appliances if you can rather than hiring someone to do that for you. Otherwise you can consider living without them for a few months until you have things back on track.

While it might take longer than you like to secure another job, enduring severe measure while unemployed goes a long way in ensuring, when you eventually get a job, you won’t spend months struggling to get yourself out of debt.