Saving money and losing your job simply don’t work well together.
The general rule of thumb is that you should have six to seven months of money saved in case you lose your job or, for instance, you lose a source of income either from yourself or your significant other within the household.
The problem with that statistic is that it doesn’t jive with the bone chilling information that more than 60 percent of the population doesn’t have any money saved. So as much as we want to believe we’re prepared to lose our job, most of us aren’t even close.
The biggest challenge is overcoming the thought that you’ll always have income, and thus you don’t think about saving for that proverbial rainy day, and nothing is quite the downpour then realizing you’ll be losing money and income, but the bills and expenses aren’t going to stop any time soon.
Losing your job can mean you’ll have a hard time paying your bills, so the importance is to prioritize not so much how to pay late, but what bills have the most impact on your credit score. The first two are quite easy to spot: house payment and car loans. These two are musts to pay on time, and remember you only have 30 days before it gets turned over to creditors, and you don’t want to get behind on payments for that very reason, or things such as foreclosures or having something repossessed.
You can’t be afraid to also reach out to your creditors as well, and inform them that you’ve lost your job. In some instances, you can negotiate a settlement with the credit card companies for a 50 percent reduction on the total amount of money owed (or some lesser figure) that, while you have to pay it off in one lump sum, could relieve you of a monthly payment that you cant handle. The other option with creditors is that you can let them know you’ve lost your job and perhaps they will allow you some leeway. There’s always an option of doing balance transfers and taking advantage of lower interest rates to lower your payment and thus budget accordingly.
No one wants to think of consider losing a job, but the reality of the economic outlook or just how companies are always looking to save money by downsizing, you can’t keep yourself in the dark when it comes to protecting your assets but also how to react if it were to happen.
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