5 ways to budget when between jobs
No matter how it happened, losing your job is undoubtedly a shock. It impacts every area of your life, including your finances, so getting a handle on them is essential before they go astray.
Even if you’ve never looked at your finances in great detail, this will be an essential step to creating a budget when between jobs. We’ve gathered a few tips that’ll help you sort them out, develop a plan and ease your mind during this tumultuous time.
Start with budgeting
There are two major mistakes to avoid when facing your finances after a job loss:
- Underestimating your budget
- Underestimating how long it’ll take you to find your next job
While it’s good to be optimistic about your job search, sometimes it takes a while to find the right position. And if you don’t have a solid budget to start with, it can lead to some sleepless nights as your search goes on.
Below, we outline a list of financial tips to ease your transition during a job loss:
1. Apply for employment insurance benefits
Employment Insurance (EI) provides regular benefits to individuals who lose their jobs through no fault of their own and are available for work, but can’t find a job. It can take a few weeks for EI benefits to start up, so it’s important to apply right away.
2. Create a budget (or refresh it if you’ve already got one)
Most people don’t have a budget, but when you’re dealing with no income, you need to keep better track of your spending. Go through the last few months’ expenses and see where you’re spending.
Then, prioritize those expenses. Make sure you’ve got housing, food and any utilities covered first. Next, take a hard look at the bottom of the list. You’re going to have to cut those optional or “fun” expenses for now, since they can drain your savings pretty quickly.
To help you budget when between jobs, the Government of Canada has a budget planner available, plus you can get these helpful budgeting rules of thumb to follow when you get started.
3. Plan for your next role
Perhaps you’ve been eyeing a career change, or you want to get some extra training for your chosen profession. That means budgeting some spending on networking, conferences and new training courses. However, ensure these expenses will positively contribute to your job search before you part with your cash.
If your previous employer offers outplacement help like career counselling or retraining, take advantage of it. These professional, no-cost services can help you find new skills and make new connections that’ll serve you during your career transition.
4. Cut back on your lifestyle expenses
Once you’ve prioritized your spending, it’s time to see where else you can cut back. For example, staying in for meals rather than going to restaurants, borrowing books or movies from the library, and repairing clothes instead of buying new things. It may be tough in the short term, but your bank account will thank you.
5. Look for small ways to make money now
Finding a new job is important, but sometimes you need to make money now. A part-time job or temporary work can help, so look around your local area in person or virtually for ideas.
For example, you could work as an enumerator or polling station representative during election cycles. A side hustle can also bring in some extra cash, so look around for ideas on things you can do in your neighbourhood, such as snow shovelling, dog walking or helping out neighbours with odd jobs. This money won’t equal your previous income, but it can significantly impact your cash flow when you’re unemployed and looking for something new.
Losing your job is no fun, but by taking steps to budget and get your finances in order, you’ll be more in control and able to concentrate on your next career move.
If you’re looking for expert money management during your career transition, we can help. Book an appointment with one of our ACU financial advisors today.
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