Five Tips For Avoiding Debt When Changing Jobs
1. Save as much as possible.
While this may seem obvious, many people assume that they’ll be able to make it by living off their severance pay from their old job until their new job starts. Too many people, however, are surprised to find out that their job will not offer them severance, or that their new start date is a lot longer than they thought it would be. If you’re making a big change, it’s always a good idea to have as much saved as possible.
2. Have a plan before you quit.
Ideally, have your new job lined up and details such as starting pay and start date in writing. If you can’t do this, however, at least have a plan in place that includes a list of places to send your resume.
3. Cut any unnecessary expenses.
As soon as your old job ends, start making cuts. Even if you think you can get along for months, it’s a good idea to make your money stretch as far as possible. Look at cutting television channels, cell phone plans, and entertainment expenses. Odds are your transition will only last a few weeks or months, so you won’t miss the things that you cut out for too long. When you start your new job, you’ll be able to qualify for new customer discounts with many of the services you canceled.
4. Do whatever you can to earn some extra money.
If it looks like you’ll be out of work for longer than your thought, or if your savings are still falling short of your expenses, it’s time to go earn some extra money. Ideally, look for a temporary job or contract work that relates to your skills. If that isn’t possible, be willing to try something new. Think about what hobbies you could turn into a small business, or what other skills you could offer. If necessary, contact a temporary staffing firm and work for a company for a few weeks.
5. Stretch your money as far as you can.
Find out if you qualify for unemployment insurance and apply as soon as you can if you are eligible.
