5 Financial Steps to Take If You Lose Your Job
The COVID-19 pandemic has already left a devastating mark on the economy, forcing millions from their jobs in a matter of just a few months. If you're in that group, we're here to help.
Our lead financial educator, Stacey Black, recommends taking the following five steps as soon as possible to manage the impact of your unemployment.
1. Apply for Unemployment Benefits
The state of Washington has expanded access to unemployment benefits as part of its response to the pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act expands unemployment benefits to include part-time and self-employed workers, including contractors and gig workers.
If you haven't already, Washington residents can file claims at esd.wa.gov. On that page, you can also find a variety of financial resources beyond filing for benefits, including career counseling, training, and help with skills such as resume and cover letter writing.
2. Assess Your Health Insurance Coverage
If you had health insurance through your employer, reach out to your insurance provider. Depending on when your premium is paid, you may be covered for a length of time after you stop working. What's more, there is sometimes a grace period in coverage you'll receive.
If you need to apply for a new health insurance plan, you can do so at wahealthplanfinder.org.
3. Prioritize Your Expenses
Make a list of your essential expenses. Keep items like housing, utilities and food at the top of your list, and work your way down from there.
"You may already be saving money just by staying home," Black said. "For example, you probably aren't using as much gas or eating out as much. Try to reallocate that money to paying these essential expenses."
Once you've made your list, go through each expense on it and notate anything on which you may be able to delay or defer payments. Mortgage lenders, utility providers and others are working with consumers through this difficult time, so it's important that you proactively reach out if you need to discuss alternative payment options.
4. Tap into Community Resources
Do some research on the web to find resources in your community that may be able to help during this employment lapse. A common mistake, however, is assuming you don't qualify for help. For example, many food pantries offer services to all people. You can see a comprehensive list of food pantries in your area by visiting the Emergency Food Network. Another quick way to check on available support services in your area is to contact United Way by dialing or texting 211, or find your local office at unitedway.org.
5. Pause Your Debt Payoff Strategy
In times like this, it can be a good idea to reconsider your debt payoff strategy. If you're paying more than the minimum payment on your credit card, for example, now might be a good time to revert to minimum payments only. Focus your efforts on saving as much as possible for now and prioritizing your essential expenses. You can resume your original debt payoff plan when you find yourself on more financially stable ground.
If you're feeling worried about keeping up with credit card bills or loan payments, call your creditor or loan provider, as they may be able to offer relief by allowing you to skip a payment, modify loans, or potentially offer options for refinancing.
This also might be a good time to look at your monthly subscriptions and cancel any you aren't using - especially if the subscription is billed automatically each month. It can be easy to forget about money we're not consciously spending, so take this opportunity to assess where your money is going and see if there's any chance you can stop any services you aren't using - even if it's only temporarily.
The goal here isn't to stop having fun, but to stop spending as much money to have fun," Black said.
We also encourage those who are experiencing a reduction in work or a layoff to schedule a Financial Health Check with a BECU specialist. During this free, confidential call, you'll get help with effective money management practices and tools to help you stay on track. Make an appointment online or call 206-436-2812 to sign up to sign up for a free one-on-one session.