I lost my job, how should I manage my money?
Direct answerWhen you lose your job, the biggest risk is keeping your spending as if income will be back soon, quickly burning through severance and savings. The first step is to calculate how many months your available money covers essential expenses only, and cut everything non-essential right away.
How it shows up
Your income has stopped, the bills keep coming, and you don't know how long you'll be able to pay for everything.
Most likely root causes
- Keeping your old lifestyleSpending as before shortens how long your money will last.
- Not knowing your essential costsWithout separating essential from optional, cuts come too late.
- Turning to credit too soonUsing cards and loans to maintain your lifestyle creates debt for when income returns.
- Not knowing your rightsBenefits and money you're owed may be going unclaimed.
Quick self-check
- Do you know what an essential month costs you?
- Have you already cut non-essential spending?
- Have you checked all the rights and benefits you're entitled to?
- Are you using credit to get through the month?
If you answered yes to two or more, start with that cause.
First step today
Calculate your essential monthly cost today and divide your available money by that amount.
30-day plan
- Week 1: cut non-essential spending, check your employment rights and unemployment benefits, and notify creditors if you might fall behind.
- Weeks 2 and 3: prioritize housing, food, basic bills and health, and look for any temporary income you can get.
- Week 4: review how many months of coverage you have left and adjust the plan as your job search goes.
When to seek professional help
Contact legal aid or your union with questions about severance and your rights, and social services for support. If you're at risk of falling behind on debts, reach out to creditors before the due date to renegotiate.
Frequently asked questions
- Should I use my severance to pay off debt?
- First, secure the essentials for a few months. Debts can be renegotiated; housing and food can't wait.
- Does it help to let my bank know?
- Often, yes. Negotiating before you fall behind usually opens up more options.