This post may contain affiliate links, allowing us to earn a commission on the products we would recommend to our families and closest friends. You can find more info on our Legal Stuff page.

Today’s post comes from fellow S&S reader, Tori. Don’t let a lay-off ruin your finances. Here’s how to stay above water if you lose your job.

Do you have an idea or a post you’d like to share? Contact Us! We’d love to hear from you.

How To Avoid Going Into Debt When You Lose Your Job

In an increasingly unstable job market, there’s always a chance you could lose your job. Even if you’ve been with the company for years, there’s no guarantee they won’t hit hard times and have to lay people off. That can land you in a really difficult position because you’ve suddenly lost your income.

When the bills start rolling in and you don’t have the money there to pay them, you might resort to borrowing to cover your expenses. That’s a dangerous game to play because the worst time to get into debt is when you don’t have an income to repay the debt.

But the good news is, if you handle the situation properly, you should be able to get by without borrowing. Here’s how to avoid falling into debt when you lose your job.

Use Your Emergency Savings

Possible job loss is just one of the reasons you should be putting money aside into an emergency savings account every month. If you don’t already have an emergency savings fund, read this quick guide to starting an emergency fund and get going straight away.

Now is the time to use those emergency savings, but you’ve got to be careful. Don’t just carry on spending as you normally would. You’re working with a limited amount of money and you don’t know how long you’re going to need to make it last for. It’s fine to dip into your savings, but only if you’re using it for essentials. Don’t start eating out and buying luxury items with it; you can’t afford to do that right now.

Prioritize Bills

If you are going to miss some bills, you need to start prioritizing them and deciding which ones are most urgent.

Some companies will be more lenient with you so get in touch with all of the people you owe money to, explain your situation, and see whether they’ll give you a bit of an extension. Pay off the ones that say no first and then try to handle the rest as soon as possible.

Find Some Fast Cash

You won’t be able to land another job right away unless you get really lucky but that doesn’t mean you can’t find some cash to help you get by. If you know how to make money fast online you should be able to cover any immediate expenses and buy yourself a bit of time.

There are so many different ways to earn quick money online like filling out surveys or testing websites. Do whatever you can to earn a little money while you’re finding another job.

Borrow Sensibly

In some cases, if you’re struggling to find another job, you might still have to borrow a bit of money. You should only do it as a last resort and if you are going to do it, make sure you do it sensibly. That means avoiding any short-term loans that have excessive interest rates. Try to find credit card deals with a zero interest introductory period so it’s easier to pay off when you find work again.

Getting into a cycle of debt is always a tough situation but it’s even riskier if you aren’t working. If you lose your job, take these steps to stop yourself from falling into a cycle of debt.