5 Tips to Combat your Debt When Unemployed
The downturn in the global economy has hit the U.S quite hard. Data from the Labor Department reveals that unemployment rate in America is currently 9% which is quite alarming. Consequently, a lot of people are facing credit crunch and are left with no other choice but to consider scary options like debt management programs.
If you have already racked up a lot of credit card debt then your situation is certainly not enviable. Being unemployed in such a situation can make things worse. However, there is no need to lose hope. You can definitely get back to your feet if you know some smart ways to combat debt. Here are a few tips which would help you to climb out of the trench even if you are unemployed at the moment:
1) Budget your way to financial freedom
Do you know why you are drowning in a sea of debt? It’s not just because you lost your job and were running short of cash. The main reason is that you did not spend according to your means. This is where a budget can help you. Use the budget to know the gross family income including unemployment insurance, spouse’s income etc. Next, make a list of your expenses including debt related payments. Finally, Estimate how long it can take for you to find a job. Consider the above points and prepare your budget accordingly. Your task may not be very easy because your income will probably be less than your expenses since you are unemployed.
2) Embrace frugal living
You might hate frugal living but you do not have a choice. Until you find a job, you would need to spend your money with a lot of care. The emphasis will be on needs rather than wants.
Stay miles away from credit cards. Forget eating out or buying expensive outfits. Lower your cell phone bills at any cost. Part with luxuries like premium internet packages, buying expensive perfumes etc.
3) Look for part time jobs
It might not be easy for you to get a regular job soon enough. Under the circumstance, you can consider some easily available part time jobs to earn much needed cash.
If you have experience and expertise on a certain subject then consider starting consultancy services. If you have knack for photography then use it to earn some extra bucks. Web is another great place to earn money. You can opt for online marketing or become a freelance content writer and earn money.
4) Come out of financial blues
You are indeed going through a tough time and suffocating under the burden of debt. It is natural for you to feel lost but you need to understand that getting into depression is not going to help you. Focus on the positive aspects of your life and cheer up. Learn from your past mistakes and plan your moves carefully. Visiting a psychological counselor often helps in this kind of situation.
5) Turn to your loved ones for help
You need emotional support. You really do. So keep your ego aside and let people help you. Your friends and relatives can provide you some much needed psychological support. Some might even help you financially.
Also, some non-government organizations help unemployed people in different ways. You can also approach your creditors to assist you with a new payment plan or by forgiving a part of your debt.
Being in debt and being unemployed at the same time can be a very painful experience. To get out of this mess, you would need to be disciplined and smart. So remember the above points and start your quest for a debt free life today.
Guest post by Marc Brown
(Marc Brown is a financial writer with Oak View Law Group. He has been consistently providing people with unique advice on budgeting, investment, and debt relief at www.ovlg.com since 2007)
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