Whether you have been laid off or you are serving notice period, there is no guarantee that you will land a new job immediately. Managing finances become convoluted when you are out of work, especially when you do not have savings enough. Though you have an option to apply for unemployment benefits, you are likely to face difficulty managing your finances.
In case of any unexpected expenditure, you can take out quick loans for unemployed, but they are not easy to afford if you overspend. Going over your budget is not good news for your finances as you will end up with a shortage of cash. A tight financial condition can keep you from paying off you loan and push you to take out other small loans to clear previous dues, and eventually, you will fall in debt. Here is how you can avoid unbudgeted spending when you are jobless:
Consider little expenses
Do you make small purchases? You might think it may help you save a lot of money, but buying so many little things can add up your expenses. It is very common that you make little buys and do not realise that unless they burn a big hole in your pocket. For instance, if you spend £5 on a coffee every day, the weekly cost will be £35 and monthly £150. It seems a very small expense, but it can cost you over £100. Track every little expense that you make throughout the month. No matter how small it is, it will add up to your monthly bill.
Do not infer that you cannot spend money; of course, that is not possible, but it is important to count every tiny expense you make that more often than not slipped through the cracks. Budgeting such little expenses can be difficult and frustrating, but it is worth it when you cannot afford to go beyond your budget.
Avoid peer pressure
Do you keep up with the joneses? If yes, you are likely to have a lot of money down the drain. Most of the unemployed do not restrict their spending just because of peer pressure. Even if you have a good bond with your friends, it will be difficult to deny them if they want to have dinner in an expensive restaurant. Money is a very sensitive topic that you cannot discuss with everyone, but try to be honest with yourself. If you take stock of your financial situation, you will be able to avoid falling in debt.
During unemployment, it is very important that you do not overspend. Do not focus on what your friends and neighbours are doing. Instead, you should set financial goals for yourself. What is important for you, what you want to achieve. Once you have identified your goals, try to make all efforts in direction of achieving them.
Window shopping can influence you
You are at loose end, so you decide to go to a store for window shopping. Well, there is nothing wrong, right? It is not wrong as long as you are able to control over your temptation. As you see displayed items in the store, an idea flashes across your mind is whether to put in a basket or not. Studies have found that people who try something on or even pick up things are more likely to buy them even though they do not intend it. A better way to avoid overspending is going shopping only when you need something urgent.
Aforementioned tips have been suggested by HonorFinance. These ways can help you avoid overspending.