Today, the market is bad and the unemployment rate is getting higher and higher. If you are the unlucky one and just lost your job in this recession season, you will have a lot of planning to do for your personal finance and future.

In normal financial planning, we are advised to keep at least 3 to 6 months of living expenses. If possible, keeping an emergency fund that equals to our 3-6 months of full income is even better. This is the money that you can use if anything emergency happens in our life, for example downsizing.

Now if you lost your job and you never keep any emergency fund or even including this “disaster” in your financial planning, then you should take action now and compile a better and more completed financial planning for your future. If you can afford, you should consult the financial planners or advisers for their professional opinions. But if you are tight in money and you lost your job in this recession period, then you can carry out the following steps for your personal financial planning.

Keep a record!

Yes, it might be too late to keep a record on your expenses now if you never do it before. You should have completed this before any financial disaster. But in this tough time, it becomes more important for you to know where your money is going. This will allow you to have a clear picture on your cash flow and spending habits. If you never keep a record before, you will never know that there are a lot of tiny, unwanted and not necessary expenses actually taking money out from your pocket. Besides that you will never know how you are going to plan for your finance and future without any information on your income and expenses. We can plan because we have certain knowledge and information on our head that we can forecast what will happen in future. Therefore, you will never make a good financial planning if you don’t understand your current cash flow.

So start from today, just write down how you spend every penny and along the way please analysis what kind of expenses that you can cut or lower down. Keep doing this for at least 15 days to get the first picture of your cash flow. You can continue and keep 30 days of record for better understanding.

Start a budget

You will have a lot of information on your hands after keeping a record for 2 weeks. Just analyze them and you can start budgeting and gain control over your money. You just lost your income source(job) and you should change your spending habits and spend wisely. Now you should only spend money on something that is necessary, important for your life for example foods, cloths etc. But this doesn’t mean that you can eat something very expensive or wear something that is luxurious. You should spend minimum to get the maximum returns. You should control your expenses and lower it as much as possible.

Now you should forget about all the new gadgets that you plan to buy. In this tough time, you should not add extra expenses to your budget.

So start a budget, limit the expenses and spend according to your budget. I wish you can feel the uncertainty and panic because you lost your income. Now you have to spend wisely so that you have enough money to pass this downsizing period. This should be a motivation for you to start a budget. Please don’t complain that living under a budget and below your means is tough. You really have no choices as you just lost your income.

Hold a Family Meeting

You are not alone. No body is alone in this world. Your family is the one who always stay besides you. So please don’t keep all the financial problems from them because they have the right to know the facts.

In traditional family, people think that it is bad to talk about money, family expenses in front of their family and children. Some of my friends even think that parent should take care all the financial problems and the children should only concentrate on their studies. I don’t agree with this.

Today, financial literacy among the youngsters is very low and most of the new generations don’t even know how to manage their money properly. This is why today’s students have a lot of debt even before they get their first jobs! and the main reason is they are never exposed to the financial issues.

Therefore, I strongly agree that parents should let their children knows about family financial problems and status. This will let them become part of the family financial planning and let them have earlier education on money management. Therefore the next thing you should do is hold a family meeting and announce that you have lost your job. This is very crucial and you must do this because you need their supports to start your budget and your plans. You won’t go anywhere if you want to save money while others keep their spending habits and lifestyle without cooperation.

Downsizing is a tough time and you definitely will become stressful. You need supports from others to keep going. Therefore, please announce your condition to your family so that you all can pass this hard time together.

Change Your Lifestyle

Ok, let’s face the fact. You just lost your jobs and if you have no other incomes other than your jobs, then you have to change your lifestyle. Financial Security is what you want to have right now and not financial comfortable.

Therefore, if you have more debts than cash on your hands, then you have to do something on your liabilities. Maybe you can sell your car if you have extra cars in your house. Maybe you can move to a smaller house with lower rental. Or even rent half of your house to others so that you can share you housing burden with someone. Be creative to lower down your debts, your financial liabilities, your expenses and get more cash on your hands.

Cash is king in any financial disaster. I know you don’t wish to lose your big house, nice car or any luxurious gadgets. But I tell you, these things won’t help you in your financial disaster. They are liabilities and they are taking money out from your pockets. In normal day, you have your job to afford them. But today, you lost your jobs and you definitely cannot afford them. So please let them go…

The theory is very simple here: Change your lifestyle, lower your expenses and have more cash on your hands.

Conclusion

Yes, it might be troublesome to keep track your expenses, it can be hard to live with a budget, it can be shameful to announce that you lost your job in front of your family and it is hurt to lower down your luxury lifestyle. But now you just lost your job and don’t you worry about your future? Don’t you think you should do something to pass this critical time? If you say yes, then you must do something and not stay away from the fact and keep your mind away from the disaster. Face it and take action! You can do this, I believe you can!

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