You just got let go from your job. Moving twelve hundred miles to where your company transferred your job is not in your budget. So what do you do? Although you will get unemployment, you will take home 60% less money. Now here is a strategy that many people make. Let’s see how effective it is.

They say I will pay my house note/car note because I have to have a place to stay and a car to get around and go to interviews. I will let these credit cards go for now. If I am able to get a job within the next two or three months, I will catch up on them at that time. If I am still not working at that time, I’ll just have to deal with it.

This is what I call a reactionary move. By reactionary, I mean people do this because they lost their job. Although they might not verbally say so, mentally they might say those credit card people and medical bills can wait. I have to make sure I survive. Can you relate to this situation?

Let’s consider some practical solutions. If you have all of your bills set up on automatic withdrawals, you may want to consider doing the following things. 1. Have the automatic deductions extended to make sure you have enough money to cover them when they become due. Three to five days after you get paid should be a good deduction date. 2. You can have the automatic deductions stopped for now.

3. Whether you are getting income or not, you might want to explain to your creditors what is going on. They may be able to set you up on a special payment arrangement. This is a good time to go over your budget. If your income is drastically cut, you should look at all things you can do to cut your spending. If you are serious, your daily coffee, donuts and other miscellaneous spending will be put on hold. In part 2, we will discuss some other things you can do.