3 of 12

Write now Article Tools

The period in between job can be one of the most frustrating experiences. It is stressful to leave an old job and be unsure as to whether another one will be available. It can also be a drain on the finances, as money is been spent and not earned. One might worry about the best way to utilize money. Should you save your money or use it to pay off debt? Although, some may find it wise to focus on one or the other, it is best answer is to do both.

Saving money is essential during any change in employment status, especially because the uncertainty of the future. The easiest way to save money when you are without income is to cut back. At the grocery store, use coupons, buy less unnecessary food, and choose generic over name brands. Shop around for a bargain. When going to interviews, job hunting, or running simple errands, you may save money to take the bus. You can also reduce consumption of utilities as well. Adopting practices as using the heater and A/C less can save quite a bit of money. Wash dishes by hand instead of using the dishwasher to save on you water bill. You may also need to reduce the amount of water used to water your lawn (lessen the effect on your plants by watering at night). In short, the best way to save money during a job transition is to spend less.

Also, even though the idea of not buying luxuries seems like common sense, many people find it difficult to break such habits. Commodities like lattes and bagels are luxuries that can be replaced with eating and drinking at home.

Even though it may be instinctual to save your money, it is very important to continue paying off your debt. Although it may not seem like a priority, your mortgage and other credit payments will not take a break when you stop working. Ignoring bills will allow them to pile up and negatively affect your credit, which will influence your buying power in the future. Funnel money towards the debts that will have the largest impact if left unpaid, such as the payments for your house, car, and insurance. As soon as you are out of work (or even beforehand if you have the option), communicate your employment status with your creditors and talk to them about your options.

It is imperative that you should negotiate with your creditors into paying as little as possible. Some banks offer credit protection (which will require a small monthly fee). This allows you to temporarily stop payment on your credit card when you are in between jobs. During this period, you will not be charged interest. Some mortgage lenders offer a catch-up plan, allowing you to delay payment on your mortgage for the few months in-between jobs, and resuming normal payment when you are employed, along with a percentage of payment missed while out of work. .

It is difficult to figure out what your financial priorities should be when between jobs. Your focus should be on making payments that allow you to keep what you need to stay afloat while saving money

Learn more about this author, Olufunmilayo Salami.
Click here to send this author comments or questions.

Add your voice

Know something about Financial priorities during a job transition: Save money or pay off debt??
We want to hear your view. Write now!