Planning. It’s singlehandedly the best thing you can do for your budget. It allows room to allot funds for retirement, unexpected bills such as an increase in a utility bill, a veterinary or ER visit and even room to budget for entertainment and family weekend activities.
But does your financial outlook include a plan for an unexpected job loss?
You may be making plans for the funds coming in each pay period, but if those funds cease to find their way into your checking account, you’ll likely be forced to access savings, or worse—available credit. Looking ahead and planning for a loss such as this is just good practice. As you may consider setting aside a portion of your income each pay period for unforeseen circumstances, putting away a little each month in the event you or someone in your household loses income will assure you’ll stay financially sound as you search for another job.
In the September issue of Consider This, a publication issued by Georgia Credit Union Affiliates, a recent poll suggests close to 31 percent of respondents stated they would not be able to cover even a month’s expenses after a loss of income.
Though the unemployment rate is down to 6% from 10.5% in 2010, the rate at which Georgians have experienced a job loss or loss of income still has a great impact on our economy and the financial choices we make.
When creating your financial plan, here are a few things to keep in mind:
- Begin contributing funds to an emergency funds account. A minimum of 6-9 months is suggested. MembersFirst offers special savings accounts with no fees that you may use for any purpose.
- Even a little income is better than not at all. If having difficulty finding another job that’s right for you, consider working in a temporary or part time position to continue bringing in an income. Contact the Department of Labor for assistance if needed.
- Stay diligent. Should you experience a lay off or termination, try to get ‘back in the game’ as soon as possible.
- Borrow funds from a current investment. If you find yourself out of work for an extended period of time, avoid accessing lines of credit – this could cost much more in the long run.
- Evaluate and reevaluate. What are you spending money on that could be cut from your budget temporarily? Try lowering your cable or cellular plan to the minimum until you’re back on your feet.
- Consolidate your credit cards into a fixed-rate loan. Making one payment to one financial institution at a fixed rate is better for your credit (which a new employer may check) than missing payments.
- De-Fee Yourself. Are you paying unnecessary fees for banking services? Open a no-fee checking, like our No Fee Checking account at MembersFirst.
- Consider making a Credit Union your primary financial institution. Credit Unions, in general, charge less in fees on products and services, such as checking and savings account, and less interest on loans than a traditional bank.
- Talk to a Member Advisor. Let one of our team members help you identify the best way to maintain financial calm as you search to replace lost income.
Do you have a plan in the event you have a loss of income? Which unnecessary expenses will you plan to remove temporarily? We’d like to know–weigh in on the discussion.
For more on how you can reduce fees and keep more of your hard-earned money, stop by one of our locations, visit us online at MembersFirstGA.com or give us a call at 404-978-0080.