Think You May Be Losing Your Job Soon? Make These 5 Money Moves Now
If your next paycheck is uncertain because of a possible furlough or layoff, the time for action is now.
The stay-at-home orders issued by states to help stop the spread of the coronavirus has left many businesses unable to stay open or retain their staff.
As a result, the number of unemployed people rose by 1.4 million to 7.1 million in March, and April promises even more.
Although it may be scary and overwhelming, there are actions you can take before you lose your job that can set you up for better financial stability during this uncertain time.
Here are five ways to prepare financially if you think you may lose your job soon.
Money Moves to Make If Your Job Is in Danger
If you think your job is in danger, don’t bury your head in the sand. Take these steps instead:
1. Hoard Your Cash
Despite your angst, this is not the time to engage in retail therapy. In fact, it’s time to hold onto every available dollar, in case your employment status changes suddenly.
“Hoard the cash until you know what’s going to happen with your job and how you’re going to get unemployment benefits,” said Ariel Ward, Certified Financial Planner at Abacus Wealth Partners. “Putting it somewhere liquid is the best bet.”
And although we normally are big fans of investing in your retirement, that’s not a money source you can tap quickly. So if a job loss is imminent, it may be time to reduce your 401(k) contributions.
So what’s an “emergency” that would allow you to spend your emergency fund? Here are four questions to help you decide.
Redirect that investment and any additional money toward your emergency fund.
If you think there’s still time, Ward suggested opening a high-yield savings account so you can earn at least a little extra interest on that money.
And if you need to find ways to save every cent, consider switching to a barebones budget now so you can put aside a few more dollars you can use later.
2. Seek Another Source of Income
The best time to start looking for another job? Before you leave the previous one.
If your employer has cut your hours, you may already be feeling the financial pinch. But even if you’re still earning your regular paycheck, it doesn’t hurt to brush up your resume, update your LinkedIn profile and learn a marketable skill.
Whether it’s one of the thousands of delivery service jobs or finding a side gig you can do while under quarantine, an additional income stream can provide at least some financial cushion if you lose your regular paycheck.
And if you’re thinking now might be a good time to swap out your current job for a remote one, check out our work-from-home portal for daily job postings.
3. Find Out What You Need to File for Unemployment
This probably isn’t the most enjoyable way to fill your free time, but you need to research how to file an application for unemployment in your state (you can find your state’s requirements through the U.S. Department of Labor’s CareerOneStop unemployment benefits page).
Why do all that work if you haven’t lost your job yet?
The CARES Act legislation extends eligibility for unemployment benefits to workers who quit a job for coronavirus-related reasons, like contracting the virus or caring for someone who’s being treated.
Because if and when the time comes, you’ll probably have a lot to deal with — including figuring out how to prioritize when you can’t pay your bills and attempting to manage your stress.
By knowing what you need to file for unemployment, you’ll remove at least one stressor from your list ahead of time and start receiving your benefits as quickly as possible.
4. Maximize Your Work Benefits While You Have Them
Use ‘em while you got ‘em.
Your benefits, that is.
If you get your health insurance through your employer and your job is in danger, now is the time to take advantage of healthcare coverage.
Although you might not be able to schedule dental cleanings and eye appointments right now due to social distancing restrictions, you can schedule a telemedicine visit. And if your plan allows it, refill your prescriptions now.
You should also read through your employee handbook or portal to learn how the company handles extended healthcare coverage, accrued vacation time and severance packages — and what you can possibly negotiate for.
5. If You Qualify for a Stimulus Check, Make Sure Your Info Is Updated
The sooner you can get your hands on money available to you, the more able you’ll be to handle the financial fallout of a looming layoff.
If you qualify for the $1,200 as a single filer or $2,400 as a couple — plus $500 for each kid under 17 — that money may become essential for paying bills if you lose your job this month.
So if receiving a check depends on filing your 2019 taxes, don’t wait for the extended deadline.
And if you have filed your taxes, check with the IRS site to ensure your direct deposit information is on file so you won’t have to wait for a paper check. Here’s how to find out exactly when your coronavirus check will arrive.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.