What To Do During A Job Loss Or Financial Crisis

Have you lost your job? Was your income cut in half by a lost contract? Was your entire department laid off? There are many ways you might end up in a financial crisis but regardless of how it happened there are a few common things you should do to make it through.

Your budget priorities during a crisis like a job loss or coronavirus mean you are covering the basics and moving into survival mode. This is based on Dave Ramsey’s four walls ideas with a few extra ideas of my own thrown in based on losing multiple jobs in the past and going through a recession when I first graduated college.  This is advice for anyone facing an unexpected loss of income and stuck in a situation that is a financial crisis. 

Don’t panic. 

The initial instinct after a financial crisis like a job loss is to panic and default to anxiety about the situation. This doesn’t help and you need to do your best not to allow panic to set in. Learn how to handle uncertain times and do your best to be alert, not anxious.

  • Finding yourself in a financial crisis after a job loss feels scary, but don’t panic. People go through this and come out the other side all the time. It’s possible. 
  • Give yourself some time to feel upset or have a good cry. Seriously get those emotions out. Allow yourself a few hours or even a full day to just feel what you feel. Then, let that go. Getting it out does help, promise.
  • Take action. You can definitely get through all this.  Be alert and active, not anxious. 

Compile your resources.

Calmly compile all the resources available to you and can expect to come to you in the coming weeks or months.

  • Add up all the money you’ve already saved for a rainy day if you have any and see how far it will get you. 
  • Calculate how far that money will cover your immediate basic needs. 
  • Look at what you already have on hand like pantry food and make a list to see how far it can stretch. 
  • Review any ways you are currently bringing in any amount of income like side hustles and any money you may have coming to you like a tax return. 
  • File for unemployment if you lost your job and disaster relief if you are able to because it’s available. I will leave links for sites in the descriptions

Pause all extra debt payments.

If you have been working the debt snowball, it is time to stop making extra debt payments. Survival mode budgeting is when you cut out all extras from the budget which includes making extra debt payments.

  • During a crisis / storm you will pause Dave Ramsey’s baby steps or whatever debt payoff plan you are following.
  • It is not the time to pay off extra debt. What you should do is pay the minimums if you can after taking care of your four walls.
  • Call your loan company and ask if you can defer due to hardship. If you know you won’t have the money to pay the bill, tell them. It is much better to be proactive than to just not pay and destroy your credit.
  • Make a survival budget. This should include the four walls I’m going to go over and very little besides it. In an emergency you don’t stress about how to pay your cable bill. 
how to budget for a crisis if you lose your job

Budget Priorities During A Crisis

When you are thrown into a financial crisis, you must adjust your budget. If you have lost your entire income due to a job loss then you are in an emergency and your emergency budget needs to have different priorities than your normal monthly budget.

Your emergency budget during a crisis should focus on making sure the basic necessities in life are covered first. That means you need to cover 4 things before everything else. Your money needs to cover those things in order and then move on from there. It is a great time to learn how to live frugally and improve your budgeting skills.

So what should you pay for first in your emergency survival budget? Keep reading.

Take care of food basics first

Eating food and drinking water is essential to life so this needs to be the number one priority in your survival budget during a money crisis.

  • Make sure you are feeding your family so that you are heathy and functioning. 
  • This means making food at home on the cheap. 
  • Lean how to cut that food budget and make cheap meals at home. There are tons of frugal ideas on YouTube and Pinterest. 

Next keep your utilities on.

After you have made sure your family is fed and healthy, you need to prioritize keeping your utilities going so you have lights and water.

  • Keep your utilities paid so you have lights and water
  • Call the utility companies and see if they have ways to postpone or skip a payment due to hardship
  • If its a national emergency or disaster then there is often also special help for these. Call and ask.
  • Find ways to lower the utility bill over all and run the heat or air less so you don’t have to use as much money for this. 

Then take care of shelter next.

The next budget priority during survival mode is to pay for your shelter – either rent or a mortgage payment.

  • It is easier to manage life and move through a crisis if you aren’t in danger of being homeless. 
  • Use all possible money to make sure you make your mortgage payment or pay your rent. 
  • Again if a national emergency or disaster call your mortgage company or landlord to see if they have relief options to help with making the payments.

Finally take care of transportation.

The final budget priority during a financial crisis is paying for transportation so you have a way to get around as needed.

  • This means either paying for your car and gas or finding out how to pay for public transportation.
  • You need a transportation source generally to get to a job or to get out and get groceries.
  • You don’t need a huge care payment and this can go if you are in a huge crisis. You can get a beater that gets you from point A to point B. 

Everything else besides those four things can wait or be delayed in your budget. 

Make money however you can.

During a financial crisis where you’ve lost your income, you need to focus on bringing in money in any way you can.

  • File for unemployment if you lost your job and disaster relief if you are able to because it’s available.
  • Deliver pizzas or find whatever you can. Drive uber eats. Sell hour long remote coaching sessions in your field of expertise. 
  • Right now stores like Kroger and Costco are hiring for immediate starts. If you just lost your regular job, go straight to a store and apply.
  • Start a side hustle to earn money if you’ve been thinking about one.
  • Make enough money to survive and pay for your four walls that are most important to get you through until you increase income and things return to a new normal.  

Finally take care of your health.

Health is wealth. That statement is true and making it through a financial crisis means you need to take care of both your physical health and mental health.

  • It’s easy to fall into bad routines and bad mental health when you lose a job. Be alert and aware of that happening and act to prevent it.
  • Stay active however you can with your abilities. There are tons of free workout videos on YouTube.
  • If medications are part of your mental health routine, they need to be priority number 1 just like food. 
  • If you go to therapy, that might need to stay a priority in your budget as well. You need to protect your mental health over paying something like a cable bill. 
  • And find ways to take care of yourself – pray, meditate, practice gratitude, complete acts of kindness, call a friend, take a walk in nature. Do all the things that might not feel important but will lead you to stay healthy physically and mentally. 

Those are just a few ways to make it through a financial crisis like a job loss, temporary layoff, or any other sort of disaster like the current pandemic hitting the world hard. It is important to buckle down and go into survival mode so that you can make it through to the other side.

Time like these or any financial crisis are a great reason to pay off debt and a good reminder why we all budget and save emergency funds.

Remember that storms don’t last forever and that kindness can be shared even without an income. Take care of yourself and those around you. 

Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.