(FinancialHealth.net)- Nothing could be worse for you financially than being unemployed. If you’re one of many Americans who have lost their jobs because of the pandemic, then it’s time for you to make some major changes so that life can be more affordable. For years, America’s unemployed have depended on jobless benefits to put bread on the table and pay the bills, but many don’t know how to make the most of the benefits that they get. If you are still having trouble coming up with the right spending strategy that’s going to get you through this difficult time in your life, we have a couple of tips that we can show you to make things easier.
Jobless Benefits Cannot Escape Taxes
It’s an inconvenient truth that many have to face. Unemployment benefits can be taxed, so take all the necessary steps to prepare yourself to pay it on time. In addition, it is compulsory to ensure that your jobless benefits are reported when doing your tax returns.
You do also have the option of filling out an IRS Form W-4V, which will withhold 10% of your unemployment benefits to pay the taxes. However, even if you do that, 10% might not be enough to cover the taxes that you will have to pay, and take note that this is not recommended if you are struggling with basic living expenses.
Improve Your Budget Plan
Basic living expenses are what should be prioritized in your new budget plan, being that you will temporarily not be making any money. It is this principle that will help you make your limited resources last the longest. As a result, your new and improved budget plan should only be focused on covering anything that’s necessary for survival, such as rent, energy costs, and healthcare expenses. If the credit card company has been on top of you to pay back your debts, try to negotiate a better payment plan or postpone the debts until you find another job.
If you want to save money while shopping, be sure to collect coupons, go to low-cost supermarkets, and apply for food stamps so that you can save up as much as possible on all the essential items that you will need to get.
Eviction Protections Won’t Last Forever
Don’t let time pull a fast one on you! Though the government has been generous enough to extend eviction protections, your rent will be due soon, which is why you need to be putting money aside to pay your landlord. Don’t set yourself up for an unpleasant surprise by procrastinating because time can pass very quickly.
Got Extra? Save It and Don’t Spend It
You’re not off the hook, even if you didn’t spend all your unemployment benefits. As a matter of fact, you’re in a tight situation as it is if you don’t have a job. Keep whatever you don’t spend and put it aside. This is essential because if you are faced with some type of personal or medical emergency, you may need funds to help yourself or a loved one. Emergency funds are the safety net that you will need in times of crisis and you should have one, even if you are doing well in your job.
Communicate with Your Bank/Credit Card Company
It pays to be diplomatic sometimes, especially if you are in debt. Luckily, banks and credit card companies are willing to negotiate if you’re in financial trouble. Be sure to be transparent with your bank or credit card company about your current situation and make sure that they are aware that you are temporarily on unemployment benefits. After having that discussion, they will most likely be open to the idea of a more suitable payment plan.
~Here’s to your Financial Health!
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