How to Budget When You’ve Lost Your Job


Unexpectedly losing your job is scary. Hopefully, you have money set aside in an emergency savings account to carry you through until you secure new employment, but what if that is not the case? 

Regardless of whether you are collecting unemployment, relying solely on funds from that final paycheck, or if you have emergency funds to cover expenses, the key to making ends meet after losing your job is to budget. How do you budget with minimal income? Here are a few key points to help you budget effectively after losing your job.  


If you do not have a budget, now is the time to make one. Whether you are creating a budget or adjusting one that is already in place, your budget needs to be about the essentials. Prioritize the basics: a place to live, a way to get around, and food on the table. 

Your home

Your place to live may need to change –that may simply amount to cutting back on some of the luxuries like high-speed internet or an endless supply of cable channels to surf. However, more challenging financial circumstances may require lowering the cost of living by downsizing or moving into housing with a lower monthly rent or mortgage fee. Regardless of the changes that need to be made to your living arrangements, having a safe place to stay should also be one of your first budgeting priorities.

Getting around

Transportation may not be an obvious choice for a budgeting priority, but you will need the means to travel to interviews and work once you secure employment. To reduce expenses, you may want to trade in your vehicle for an older model to lower or eliminate monthly payments. If your household has more than one vehicle, keeping one and selling any others may help lower costs and provide much-needed cash. When public transportation is readily available in your area, selling all private transportation could be another option to help you save money as well.

Feeding yourself – and your family

Food is an important priority. However, keep in mind that food can also be a significant expense in your budget. Keep costs down by purchasing staple items in bulk, weekly meal prepping, and preparing dishes that you can get several meals out of. You can eat well without breaking the bank by trying new recipes, clipping coupons, using your favorite store’s rewards program, and purchasing generic brands.

Hustle and earn

Yes, you may have lost your job – but that does not mean you have to be without income. We are living in an era of side hustles. Whether you take up driving for a ride share service or shopping for a grocery delivery service, you can work as much or as little as you want in a side hustle and use the income to bridge any gaps in your finances while you are on the hunt for your next job. Babysitting, pet sitting, teaching music lessons, and even some church daycares can help you put a little extra money in your pocket.

Without your nine-to-five, you may want to dedicate some time to learning a new skill that could also open the door to a higher earning potential or a new career path completely. Be careful about spending money you do not have on classes or certifications right now, but the cost may be worth the reward if you can afford the education needed to take you to the next level.

If you do not qualify for unemployment or if your emergency savings account is not funded enough to support you during this transition, you may want to consider applying for any job to make ends meet for now. Remember, this is temporary so try to avoid letting your pride prevent you from finding employment. Retail or food service may not be your next career goals, but there are typically plenty of jobs available in these industries which could provide a steady income to cover your basic expenses while you are looking for your next career.

Manage your debt

Now is the time to manage the debt you have and avoid taking on new debt. You may have noticed that debt was not addressed in the budget discussion above. This does not mean that repaying your debt is not important. Rather, your focus after losing your job needs to be on the basics you need to live and secure new employment.

This does not mean to just stop making payments on any outstanding debts you have. It is important to avoid tanking your credit, especially while you are job hunting. As part of the interviewing and hiring process, many employers will check your credit in addition to running a criminal background check. So, reach out to your creditors and find out what your options are. You may be able to lower your monthly payment, temporarily pause your payments, or work out an alternative payment plan that will allow you to have more money for the basics you need now rather than sacrificing a meal to make a credit card payment.

In addition to managing your current debt, avoid taking on new debt if possible. Hopefully, you have a well-financed emergency savings account to help you make ends meet during your unemployment. However, if you have an expense that you cannot afford, consider selling clothes you no longer need at a local resale shop, pet sitting, or picking up a side hustle to earn the extra cash you need to afford your expenses rather than putting everything on a credit card. Relying on your credit card to get you through this period without income may seem like a good option, but you will be racking up interest on every dollar. Not only will you end up paying more than you would have paid with cash, but you also risk increasing the balance of your debt so much that you will be unable to make adequate payments to pay down the balance once you do secure employment.

Stay the course

Losing your job – or being furloughed – is not fun. However, with some commitment to a frugal lifestyle, a willingness to prioritize, and a hopeful outlook, you are more likely to pull yourself through until the economy turns over once again