My dad lost his job when I was five. After seeing my parents’ marriage fall apart, I learned many things that could’ve helped keep our family together. Here are seven do’s and don’ts to help you keep your family together while maintaining financial calm during a job loss.
Can you remember much from age five? I have very few memories of that year: teaching myself to tie my shoes, my dad being on the couch a lot, my mom being at work a lot, our van getting taken away by a big truck, and being in the dark for a little while. I didn’t understand what was going on at the time, my parents weren’t financially stable.
Now I understand that my dad kept getting laid off. He was a steel mill worker, and that job was never stable. My mom and grandma supported our four siblings, with a baby on the way. We ended up moving to a new house without my dad. As I grew up, I made up my mind that I would have a good job, and I worked very hard in school.
But as I grew up I realized things don’t always go as planned.
Things happen. Getting laid-off is unavoidable. Neither you nor your laid-off spouse should feel guilty. But you are responsible for the next steps you take if you want to get back on your feet. The best way to do that is with your spouse, not without them.
Here are seven do’s and don’ts I wish my parents would’ve followed that could help you stay calm financially.
Do know where you stand financially:
“Track your spending for a month,” says Stacy Francis, certified financial planner. “Pinpoint where you are spending your money. Cut out expenses you find unnecessary. Then, record what you think your expenses should be next month.”
According to Sharon Epperson, CNBC Senior Personal Finance Correspondent, you should use the money from those cut expenses to increase savings and pay off some debt.
Don’t use your credit cards:
Although it may be tempting, don’t use your credit cards. Instead, explain your situation to your creditors. Many creditors may be willing to work with you under their hardship program once they know your situation.
Do immediately find new sources of income:
File for unemployment benefits right away, Epperson says. Find new sources of income. Try refinancing your home if you have good credit, or monetize your home by renting out the basement or an extra room.
“Get as many people on your team looking for a job as possible,” YourTango.com writer Tobi Elkin says. Connections are so important. Take a job that pays less until you can find something better. Even if you find a job that does not pay as nearly as much as your old job, something is better than nothing.
Don’t raid your retirement savings:
Epperson advises against dipping into your retirement funds. If you do, your employment benefits will likely be reduced, and you’ll have to pay ordinary income taxes on any traditional 401(K).
Do consult experts:
There is nothing wrong with asking for help. Get advice from experts to find out the best ways to manage your existing resources. You need people who can guide you through this. That’s where we come in.
Don’t forget about your family:
Your children might not understand why they can’t buy as many things as they used to. They should learn to understand that you have to work for every single thing they have.
Have a family meeting to keep them in the loop. Spend time with your kids at home. Watch movies together, or play some games around the house. Remember, love doesn’t cost a thing.
Keep the line of communication open with your spouse:
If you want to bounce back from being laid-off, you and your partner have to work together. Spend time creating a financial agenda and reviewing it every week. Don’t be afraid to talk about money with your partner. There may be feelings of shame and failure with the job loss, so be sensitive to each other’s feelings.
It’s important for the spouse who was laid off not to be hard on themselves, and their partner should remind them that they are in this together.
I use the word partner, because at the end of the day, that’s what your spouse is – your partner. Make “for richer or poorer” a reality. Don’t give up on each other. Work together through it all. Follow these do’s and don’ts closely. Knowing that you are taking the best proactive steps will help keep you at peace. And remember that going through obstacles together will make your marriage even stronger!
Written by Epiphany Johnican, Journalist for Money on Your Terms
Elkin, Tobi. Reader’s Digest. Reader’s Digest, n.d. Web. 3 May 2016.
Epperson, Sharon. CNBC. CNBC, 18 July 2011. Web. 3 May 2016.