As the COVID-19 pandemic continues to affect the job market – in June, the unemployment rate for Americans reached 11% – workers in many sectors are facing the difficult challenges of job loss. Many Americans are now relying on unemployment benefits for income, which means that our normal budgets are changing.
Sticking to a budget can be especially difficult when you’re facing an uncertain economy, but it’s important to have a plan in place. Creating a new budget and adapting your mindset can help you stay afloat during times of difficulty.
Every state has unemployment payment programs in place to support people facing job loss. Now, during COVID-19, these benefits are updated in many states to accommodate the economic changes brought on during the past few months. If you are recently unemployed, you can apply for unemployment benefits online and learn more about the recent pandemic unemployment updates, plus changes to include independent contractors.
Be sure to file for unemployment benefits knowing that it is often a slow process – the longer you wait to file a claim, the longer it’ll take to start receiving money. Keep this in mind when you’re starting your claim, so you can set aside a few weeks of funds to cover your necessities.
When you receive unemployment benefits, it’s important to treat this money exactly like you would a regular paycheck. Once you start the unemployment benefit process, you’ll want to map out how much money is coming in so you can get a big-picture view of the budget you’re working with.
When you’re adjusting your budget, it’s important to make a list of all of your monthly expenses. Try to organize this information in a way that works for you – whether you want to build a spreadsheet or map it out on paper – the important thing is to get a full picture of where your money is coming in and going out.
If you are now depending on unemployment benefits, it’s important to learn how to get used to receiving a new source of income – and to use this money wisely. Set aside funds for necessities like rent or mortgage, groceries, daily living expenses and medical expenses.
Once you know what you’re working with, it’s time to adjust your goals and zero in on priorities. The main goal is to understand what expenses are necessary, and since you won’t have the dependability of a weekly, bi-weekly or monthly paycheck from your employer, you’ll have to make this list specific. When you prioritize all your expenses, you’ll be able to determine where you could set money aside for emergency savings, which can provide some peace of mind.
Ordering takeout and delivery is an expense that can add up quickly. Along with budgeting for groceries, plan out some meals you can cook at home. Cutting out dining expenses can make a significant impact on your ability to save money – and along the way, you’ll be able to learn some new recipes and possibly find ways to save more money than you might expect.
It’s still important to allow yourself a few luxuries – whether it be a delivery meal from your favorite restaurant or a visit to your local coffee shop, take time for self-care when you can.
While unemployment benefits can help you manage day-to-day survival, it’s more important than ever to have an emergency fund in place. During unemployment, an emergency fund can help you stay afloat if you were unable to receive certain unemployment benefits or need extra funds to cover a medical expense, car repair, etc.
If you don’t have an emergency fund in place, it’s never too early to start. Many experts recommend saving $1,000 or working towards this goal as a starting point. Ideally, you’ll want to make it a goal to have around three to six months of expenses in your emergency fund, and this number might increase if you or a loved one has a medical condition that requires frequent visits to the doctor.
Sticking to a budget and creating a monthly savings goal is a great way to get started – and if you can, it’s wise to continue adding to your emergency fund with any extra dollars left in your budget at the end of the month.
With all of the stress of unemployment, you might forget about your life insurance policy – but this could be a costly mistake! If you’ve purchased a personal life insurance policy and you’re worried about making premiums, be sure to reach out to your Symmetry agent to find out if you can make an arrangement with the insurance company.
Your agent can also help you figure out how your life insurance policy can work for you – it might contain a cash value savings component you could access during this time.
If you have questions about how life insurance can work for you, request a free quote and get a consultation for life insurance today. If you need to get in touch with your Symmetry agent, we can help with that too – contact us today to get started.
This article is written for informational purposes only and should not be taken as financial advice. For a detailed consultation regarding life insurance, please reach out to your Symmetry Financial Group insurance agent.