If you’re wondering how to save money when you’ve lost your job, you’re not alone. It can be hard enough saving money when you’re gainfully employed. Even when you aren’t working, it’s still critical to put some money away.
If you’re looking for the best ways to save money, you’ve come to the right place. From creating a budget to making spending cuts, we’ve rounded up a few of the best ways to save money even when you’re unemployed. Trust us. It can be done.
1. Create a Budget
If you’ve recently lost your job, one of the first things you should do is create a budget. A budget will help you see where all your money is going. Make sure to separate all your fixed expenses. Your mortgage, rent, student loans, and car payment are all examples of fixed expenses. You need to pay these bills, no matter what.
Your other expenses will be internet, cable, groceries, and eating out, for example. These services can be canceled or lowered if needed. Make sure to list everything you pay for. Whether it is a gym membership or your expensive coffee habit, write it down.
You can then assign a target budget for each category that isn’t a fixed expense. Expenses such as groceries, eating out, and entertainment can all be cut back.
Here’s where you will also need to see what you have in your checking and savings account. If you received severance or payout when you were laid off, write this down as well. You’ll then be able to see how long the money you have will last you.
2. Look at Ways to Save Money
Once you know where you stand, you must try to cut back as much as possible. If your savings are limited, you’ll want to stretch it as long as you can. You want to give yourself a comfortable cushion until you find another job.
The best way to do this is to make some budget cuts. While things like cable and music subscriptions are nice to have, they aren’t essential. Consider canceling or pausing them until you’re employed again. You may also find you’re paying for services you don’t use. Without a commute, you’ll also save money on gas and mass transit expenses.
Once you see all your expenses, you may find a couple of subscriptions or memberships you didn’t even realize you had. If you pay for a gym membership, consider pausing it and working out for free at home. Go for runs or do a free class online. Try cutting back on food and entertainment as well. A $5 cup of coffee a day can add up to $1,825 a year.
3. Save Money Automatically
Even if you don’t have an income coming in, you can still put money into your savings account. Using that coffee example from above, take that $5 you would have spent on coffee and move it from your checking account to your savings account. You can set automatic transfers from your bank’s website.
There are also several apps that make saving automatic. You can round-up your change, and that money will be put into a savings account. No matter how little you think it is, remember that consistent saving will add up in the long run.
4. Explore Assistance Programs
One of the first things you should do when you’re laid off is to file for unemployment. While you may feel ashamed or embarrassed, remember that this is what the program is meant for. Take advantage of this income when you need it.
If you’re paying a mortgage, there may also be assistance programs available. Your lender would rather work with you than have you default on your loan. If you have federal student loans, there are also deferment periods you can use while you need to.
5. Get a Roommate or Rent a Room
If you have an extra room in your home or apartment, consider renting it out. This rent will bring in extra income each month. You’ll also be able to split utility bills and other housing-related expenses.
6. Take a Part-Time Job
While you’re interviewing for a new full-time job, you can apply for a part-time position. Part-time work can be a great opportunity to bring in some income while you job hunt. In some cases, part-time jobs or temporary positions can also turn into full-time work.
While you’re working part-time, continue to save, and pay your bills on time. You’ll be able to build your savings and emergency fund back up.
7. Get a Loan
Even utilizing all these methods might not be enough to get you through these hard times. If needed, consider getting a loan to help. You can get a short-term loan that you can pay back when you’re employed again. Just remember to borrow conservatively so that you can continue to save and pay your other financial obligations.
How to Save Money 101
Knowing how to save money is one of the most important financial skills to master. Even when you’re unemployed, saving is crucial. Making budget cuts and being smart with your spending will go a long way.
If you’re ready to explore some loan options to help you through these tough times, fill out the contact form here. You’ll be contacted by a loan professional who can come up with an excellent solution for you.