Losing your job can be an incredibly stressful and upsetting time in your life, but it is important to remember that it's not the end of the world. Taking the right steps to protect your finances in this situation can help you to keep on top of your money and make sure that you can still afford to support yourself, while you look for a new job. Here are a few tips on how to protect your finances in the event of job loss in the UK.
Create a Budget
The first and most important step in protecting your finances is to create a budget. Calculating how much money you need to pay for basic necessities such as rent, food, and bills, and how much money you have available to you, will help you to decide where to make cutbacks if necessary. It's also a good idea to create a budget specifically for job hunting, so that you know you are able to spend money on finding a new job without putting your other essential needs at risk.
Talk to Your Creditors
If you are having trouble paying your bills, it is a good idea to talk to your creditors to explain the situation and come to an agreement. Depending on your lender, you may be able to get your payments suspended or reduced for a few months while you look for work. Creditors are more willing to help if they know that the job loss is only a temporary situation, so make sure to mention that when you speak to them.
Plan for the Worst-Case Scenario
It is important to be prepared for the worst-case scenario. Make sure that you are aware of what benefits and/or services you are entitled to in the event of job loss. This could include Jobseeker's Allowance or Universal Credit, and there may also be local services that offer advice and assistance.
Protect Your Savings
Your emergency fund, savings, and investments are there to be tapped into if a job loss occurs, so make sure that you know what you have available to you and any restrictions on their use. If you have money in the bank, it is important to think about how much you need for the essentials and how much you can use to help pay off any debts that you have, before dipping into your reserves.
Get Professional Help
If you are struggling to cope with the financial implications of job loss, it is a good idea to seek professional advice, such as from a credit counselling service or a financial adviser. An experienced financial adviser can help to look at your financial situation in an unbiased way and provide you with guidance on the best course of action for recovering your financial stability.
No matter how stressful job loss can be, taking the right steps to protect your finances can help to make the situation a lot easier to manage. Creating a budget, talking to your creditors, planning for the worst-case scenario, protecting your savings, and seeking professional help, can all help you to regain control of your money and your future.