A job loss hurts. Beyond the emotional toll, it’s also stressful to worry about how you’re going to make ends meet. If you lose your job and have to reevaluate your monthly expenses, there are a few categories that you should focus on first.
Obviously, emergency funds are a must for staying afloat when you lose a job. But it’s important to take a hard look at your monthly expenses, too. Most of us will need to cut back quite a bit in case of a job loss, but where do you start?
Finance writer Donna Freedman of Credit.com suggests food. Obviously, food is a necessity, but it’s usually a budget category with quite a bit of wiggle room. You can carry a lunch, start cooking everything at home, and, when friends want to go out, invite them over instead. Aside from that, Freedman suggests focusing on utilities and transportation:
Utility costs can be a real budget killer, especially during hotter-than-usual summers or during harsh winters. But it usually is possible to trim these expenses — and sometimes you can get free advice and/or materials. Contact your local utility providers.
Transportation is another place to cut. Having grown up in a rural area, I know that the car-free life isn’t always possible. But you can reduce gasoline costs by carpooling, riding a bike, using public transportation (if applicable) and combining errands. Or propose “carpool shopping” — you and a friend or two hit the supermarket together and split the gas.
It helps to focus your money saving efforts on the categories with the biggest pay-off. However, there are usually plenty of ways to save on food, utilities and transportation without suffering. For more detail, check out the full post at the link below.
How to Adjust Your Budget When Your Income Drops Off [Credit.com]