Create a “bare bones” budget and categorize your spending. Prioritize the expenses that will keep your household running. So focus on your mortgage or rent, utilities, food, and transportation.
Then assess what expenses can be cut back or delayed. Scale back “wants” and focus on “needs” that are the foundation of keeping your household on solid financial footing.
Remember that it’s just for now, and not forever.
Identify Your Non-essential Expenses
Non-essential expenses include:
- Subscriptions: Streaming services, magazines, premium apps, etc.
- Dining out: Limit dining out and opt for cooking meals at home.
- Entertainment: Cancel tickets for shows, vacations, or other leisure activities.
- Luxury items: Avoid any purchases that are “wants” rather than “needs.”
Consider which expense can be reduced or cut that is not key to keeping your household running.
Delay Large Purchases
Postpone spending on any big-ticket items that aren’t immediate necessities, such as buying a car, upgrading appliances, or home renovations.
Re-evaluate Automatic Payments
Many of us forget about things we’re paying for automatically (like gym memberships, app renewals, etc.). Make sure you’re not spending money on things you don’t need during this period.
Negotiate Bills
If you have fixed expenses that you can’t avoid (like utilities or insurance), reach out to the companies and see if you can reduce your bills temporarily or extend payment deadlines
- Contact your landlord or mortgage lender: If you’re struggling to make rent or mortgage payments, ask if they offer any payment deferral or forbearance programs, especially if your situation is due to the layoff.
- Health insurance: Look into switching to a more affordable health plan, either through COBRA or a plan available through the government marketplace, depending on your location and eligibility.
Avoid New Debt
Now is the time to be cautious about using credit cards or loans to cover expenses. If you already have debt, create a plan to prioritize high-interest debt (like credit cards) over low-interest debt (like student loans or mortgages) during your job search.