My dad lost his job when I was five. After seeing my parentsí marriage fall apart, I learned many things that couldíve helped keep our family together. Here are seven doís and doníts 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 didnít understand what was going on at the time, my parents werenít 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 donít 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 doís and doníts I wish my parents wouldíve followed that could help you stay calm financially.
Do know where you stand financially:
ďTrack your spending for a month,Ē says Stacy Francis, certified financial planner. ďPinpoint 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.
Donít use your credit cards:
Although it may be tempting, donít 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.
ďGet as many people on your team looking for a job as possible,Ē 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.
Donít raid your retirement savings:
Epperson advises against dipping into your retirement funds. If you do, your employment benefits will likely be reduced, and youíll 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. Thatís where we come in.
Donít forget about your family:
Your children might not understand why they canít 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 doesnít 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. Donít 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 otherís feelings.
Itís 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, thatís what your spouse is – your partner. Make ďfor richer or poorerĒ a reality. Donít give up on each other. Work together through it all. Follow these doís and doníts 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. Readerís Digest. Readerís Digest, n.d. Web. 3 May 2016.
Epperson, Sharon. CNBC. CNBC, 18 July 2011. Web. 3 May 2016.