According to Rockville, MD, financial planner Christopher Brown, rebuilding after a layoff and the financial recovery period that’s required after being unemployed even for a short time can be a long process.
Just ask Alan Birkelbach and his wife who underwent a difficult recovery after losing both of their jobs. Immediately after the layoff, the couple took action by cutting their expenses right away. Alan eventually got a new job with a steady income but the couple continues to watch their spending as the their unemployment experience is not something that they will soon forget.
To get back in shape financially after a layoff, the first thing you need to do is build a budget with expenses that fit with your salary. Saving for an emergency fund, paying down credit cards and enrolling in an employer’s retirement plans are some other key areas to consider. A line of credit is also something to consider if you own a house (with equity still in it.)
Lastly, splurging on big ticket purchase items that are outside your budget limits should be avoided at all costs. Small, simple pleasures are one thing but treating yourself with an unfunded big ticket purchase can cripple you financially and put you right back where you started when you were unemployed.