A sudden and unexpected job loss can leave you reeling – both emotionally and financially. Not only are you dealing with a sudden loss of income, but you are also left to sift through an emotional battleground rife with fear, uncertainty, and no small sense of loss. While you have no control over the job loss, you do have some degree of control over how you manage your finances in the aftermath of that loss. Keep these things in mind as you negotiate your way through your new, hopefully temporary, financial reality.

Assessing Your Finances

The first thing you must do is assess your current financial situation. That means you need to sit down and take stock of your assets and liabilities, piece by piece, to determine the current state of your financial affairs. Don’t forget to look at all sources of funds. That includes your severance package, unemployment income, savings, spouse’s income, and the like. Don’t forget to take into account any liquid assets you may have that you can sell or liquidate to help you through this troubling financial time.

You also have to take stock of your expenses now, too. That includes recurring bills, like utilities, mortgage, car payments, insurance (auto, home, and life), health insurance, school tuition or child care, mobile phones, cable, the Internet, and memberships. The list goes on. These costs add up, and you need to fully understand how much money you are spending each month to have an overall view of your financial situation.

Then, take in the variable expenses like food, household supplies, entertainment, gasoline and other types of discretionary spending, as well. These are all costs your family has that you will need to consider during your financial assessment.

Updating Budgets

Once you have an idea of your monthly income, it is time to sit down and establish a budget of how much money you can afford to spend each month without placing your family in financial peril until this crisis blows over. That might be easier said than done, depending on how robust your savings were and how well you were managing to make ends meet before you lost your job.

Don’t forget to look for ways to leverage your skills and talents to bring in supplemental income while you are searching for new employment. That can include everything from using your professional skills to make a little money on the side to building things, baking, painting, and even gardening for extra cash to help you get through the leaner months ahead of you.

Setting Priorities and Making Changes

Once you see the numbers for your new budget, you may experience a moment of utter disbelief. That too will pass. When it does, it is time to get out the scissors and trim some serious fat from your budget.

Some of the cuts will be more painful to different members of the family than others, but these temporary changes may be necessary for the long-term financial survival of your family. Look for things you can eliminate, like some of the following:

• Switch from a family mobile phone plan to prepaid plans that offer lower costs.
• Eliminate your cable television bill and opt for more affordable subscription services.
• Cancel unnecessary subscriptions and memberships such as dollar-a-month shaving club, beauty boxes, magazines.
• Call utility companies about leveling your monthly costs if you have not done so already.

Most importantly of all, contact your creditors and explain the situation. Many of them may be willing to work with you as long as you are open and honest with them about the realities of your financial position and what they can expect from you.

Consider applying for assistance if you qualify. There are many different types of assistance available to people who have lost jobs that go beyond the support offered by unemployment benefits. This includes things like Medicaid and CHIP insurance programs, Supplemental Nutrition Assistance Program (SNAP), and even the possibility of receiving student loans to help you return to college during your unemployment.

Don’t forget to embrace the power of bartering for goods and services you need at times like this. You may think that form of exchange system is gone forever, but as more people face unemployment, it is making a major comeback. You can also hold a garage sale to sell off items that you no longer use or need or sell items online to bring in some funds.

Losing a job is not the end of the world. You might have to make a few painful choices along the way, but you can adjust your spending and still make ends meet for many months after a job loss.