Financial Survival After Job Loss

Financial Survival After Job Loss

Regardless of age, circumstance, or position, all job seekers face common concerns. A primary concern is financial wellness. Job loss immediately affects a person financially and can raise many questions: "How will I handle the change in my income?" "How long will my unemployment last?" "Will I need to dip into my retirement fund?" just to name a few.  

This month we are fortunate to gain some financial insight from Don Schweitzer, Jr., CCUFC, the Business Development Officer for Day Air Credit Union, whose mission is to improve its members' financial condition. Don is a financial educator with over 35 years of experience and lives this mission. He also serves on the boards of the West Carrollton Education Recognition Association, the West Carrollton Education Foundation, is a past president of the Moraine Rotary, and is actively involved with various Chambers of Commerce.  

The following interview provides helpful financial tips for job seekers:

1. What immediate steps do you recommend a job seeker take upon job loss? 
The first thing I recommend is to contact the financial partners you have established over your lifetime. These include credit unions/banks, credit card/loan companies, financial planners, your attorney, and your tax accountant. These are the people who should be helping you through your financial life and should be willing to help you through what is hopefully a short-term job loss. It is important to keep these people in your financial loop. Do not ignore the situation. Take immediate action to help preserve what you have built up over your lifetime.

2. Emergencies can still arise during career transition. How does a job seeker create an emergency fund? 
Losing your job is the ultimate financial emergency. Hopefully, you have an emergency fund intended for this type of emergency. Keep in mind is that even through these tough times it is important to continue the habit of setting aside funds for the smaller "life happens" situations such as car repair or having to replace your eyeglasses that just broke. It is difficult to advise anyone without knowing the total picture. That is why it is imperative that you confer with your financial partners as soon as possible. In any case, the ability to save is a major factor in financial success or even financial survival.

3. How can a job seeker avoid falling into debt while in transition?
We should think of ourselves as a small business. We sell our services to an employer, and use our income to invest back into ourselves or our family. The problem is that, unlike a typical business that can diversify its income streams, our employer is typically the source of 100% of our income. Therefore, creating a living, breathing budget now is vital. Keep in mind, a budget is no more than a financial roadmap to help you get to where you want to be. Without knowing your spending habits, you cannot make intelligent decisions about where to cut and prioritize your expenses, how much you need to save and how much income you need to cover those expenses.

4. Could you provide a financial bullet-point synopsis for the job seeker to follow?

• Don't ignore your financial situation! Confer with your financial partners:
  • Credit union/bank
  • Financial planners
  • Lending companies
  • Attorney
  • Tax accountant
• Review or start a budget
• Track expenses
• Make tough decisions (e.g., cutting out non-essentials)
• Prioritize your spending
• Continue or start to save
• Look at your budget to determine savings levels
• Once you are back to work, increase savings levels to plan for emergencies like the one you just survived

Thank you, Don, for sharing your financial insight. Making wise decisions now can prevent future financial pain.

Now…go create your financial wellness plan!

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