© Patrick Daxenbichler/Dreamstime.com

How To Budget After Getting Laid Off

It’s OK to dip into your emergency savings

© Patrick Daxenbichler/Dreamstime.com

Getting laid off is a stressful experience that can cause embarrassment, anxiety and financial uncertainty. If you’ve lost your job suddenly, it’s important to stay focused on your mental health as well as your financial health to get you through these times.

15 Easy Ways to Start Saving Money

Creating a new budget is one of the first steps you should take. It can help you limit your expenses and give you an idea of how to spend now that you don’t have a steady income.

Because you might not know how long you’ll be without a job, making a budget based on your emergency savings could be a beneficial way to stay on your feet. If you’ve been saving part of your paychecks specifically for situations like this, now is the time to dip into those funds. You can begin to replenish what you’ve taken out once you have a steady income again.

First, start with looking at the current state of your finances. Determine how much you’ll need to budget for necessities such as your mortgage or rent, food, debt, and other personal health and housing bills.

Then, make up a budget based on the money you have in your emergency fund. This should give you an estimate of how many weeks or months you can go without having to take money out of other savings accounts such as your retirement fund or your kid’s college savings.

Related

Don’t forget to cancel any unnecessary recurring payments that your credit card is attached to, and try to cut out luxuries such as ordering food from restaurants or shopping for clothes that are not needed. Budgeting is just one important step to take if you're laid off. Here are other ways to handle unexpected unemployment.