How can an unemployed survive the recession without financial hiccups?
The UK recorded its second-highest fall in real wage growth since 2001. And as per National statistics, it stands at 4.2% today.
It represents the clear financial deterioration amid the rising cost of living standards. A person’s wages fail to keep up with the rising price, according to October 2022 stats. One of the most astonishing facts is- the unemployed are not seeking jobs either. Long-term pandemic sickness and work-from-home module.
Today, 2.5 million individuals are out of a
job owing to ill health or a confused state of mind. As a result, vacancies
dropped to 1.2 million jobs which were 1.3 million earlier. With BOE concluding
one of the longest recessions in 41 years, it is high time for jobless
individuals to take charge of their finances. The blog states some financial management tips for the unemployed in a recession.
6 ways to explore opportunities to save more
before a stressful recession
Unemployment is bound to rise manifolds until 2025. It could mean an imbalanced economy and higher prices. With these economic headwinds, unemployed individuals must take certain steps to ensure a savings bucket. It would help counter the unexpected without panicking.
1) Take stock of your financial
properties
One of the hardest parts of a recession is not knowing what may happen next. That’s why ensuring a clear understanding of your available finances and assets is important. To begin with, ask yourself the below questions:
- How much cash do you have in your hand?
- What may happen to your jobless benefits in a recession?
- Would you still receive it in a recession? If not, do you have a backup?
- What are my basic living expenses?
- Do you have any major life events coming up, like weddings or anniversary celebrations? Can the celebration wait?
Anticipate
these aspects and ensure a sufficient backup for nearly 6 months. In
unemployment, it may be difficult for you to figure things out.
However,
saving the minimal and meeting essentials sometimes stands at a sharp financial
edge. It leaves one with limited flexibility. What if you encounter medical
urgency and need urgent money? In unemployment, tapping your pockets and money
in the bank could be the slightest possibility. Some things can’t wait for
fulfillment; check the unemployed bad credit loans in the UK.
These loans strictly help out-of-job individuals fetch the instant cash facility. Book your appointment and attend the medical urgency the same day, hassle-free. You can use these without worrying about credit score constraints or income. You can qualify for these at relevant income proof.
2) Focus on clearing as many debts as
you can
Unemployment means – stopping debt payments and bills. However, it is too good to be true. Recession may make it worse for you. Channel a plan to arrange and dedicate some portion of your limited income to outstanding debts.
Although it could be difficult to lead a minimal lifestyle, you must figure out a plan. You can do so by tapping the dividends and using these for the bill and debt payments. If you are on any grant or scholarship, check which other grants can you qualify for. Here are other possibilities to earn extra:
- Rentals are costly in the UK. If you have a space to rent, you may earn a handsome income
- Place a hardship application to your lender if you cannot continue the loan payments
- Work out a credit card payment plan with the provider. Regulate your finances by freezing your accounts.
- Update your healthcare policy provided by the employer, and use the saved amount for the bill and debt payments.
3) Search futuristic career
opportunities
Recession
impact multiple industry growth and prospects. Thus, if you are unemployed and
seeking job opportunities, analyze the growing industries. Figure out whether
your skills align with the shortlisted job opportunities. If yes, then apply
for jobs in these sectors. Take the below measures to begin with:
· Increase your networking efforts
· Update yourself on the new-age skills in the respective field
· Update your resume with the need-of-the-hour skills
· Always have a side gig, such as freelancing and affiliate marketing, to ensure a cushion
4) Work on improving your emergency
fund
Within the current economy, job and pay cuts are normal. It implies one would barely have anything to count upon in emergencies. Thus, it is ideal to have an emergency fund. If you are unemployed, you can start with a minimal amount—the one you can comfortably dedicate towards the same without breaking the bank.
And if you have one, tapping an emergency fund in nearly every situation would empty it to nothing. Using a percentage to survive unemployment is okay, but one must build it soon. As soon as you grab the opportunity of the same, dedicate a slightly flexible amount post paying necessary debts and arranging for necessities.
5) Eliminate unnecessary expenses
from the budget
While you may be living on the bare minimum, reviewing your expenses is still a good idea. Sometimes, even in unemployment, one often forgets to track finances. It could be due to immense psychological strain, mental pressure, or exhaustion from responsibilities. Please do not lose the financial track as it could impact the credit score and the bottom line hard. Slash of costs like-
- Continuous streaming hours
- Unnecessary subscription
- Sell off a product you hardly use if it is in good condition.
- Switch to electricity-saving equipment
- Shop with a list and avoid buying anything that you hardly need
6) Have a practical view of your
investments
While many investors panic and sell the maximum of their potential holdings at a loss, you must think again. Thus, it is not a wise move to act on impulse. Instead, ensure a clear understanding of the market. The stock market fluctuates in recession.
It becomes highly volatile during the phrase. If you have many long-term investments, the best way to deal with the situation is – to ensure patience. If not, research the best move regarding potential investments in a recession. You would get ample ways to deal with it without panicking. If in doubt, seek expert assistance.
Bottom line
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