Couple assesing their finances together.

Most households rely on two incomes to survive. If you're one of those households, think about what you would do if, all of a sudden, your spouse loses their job. Are you prepared for this type of financial setback? If not, we've put together a few tips that we hope you'll find helpful.

My Spouse Lost Their Job...What Now?!

With the increasing necessity for households to maintain two incomes, the prospect of your spouse being laid off or let go can be downright terrifying. The number one reason for divorce is disagreement over financial issues. However, there are ways to weather the storm and make it through this difficult situation while maintaining your relationship (as well as your sanity.) Read the following information to get some basic tips on how to do just this.

Call your state's unemployment office - Unemployment insurance is temporary income for eligible workers who become unemployed through no fault of their own and who are ready, willing, and able to work. To qualify, you must have been employed for a minimum number of weeks in a job covered by your state's policy. Some states will also allow you to file for benefits on the Internet. When you call, they will advise you of the proper procedures to follow.

Give yourself a "financial wellness checkup" - The first step in developing any financial plan is to evaluate your current financial situation. To begin, determine your net worth. This is calculated by drafting a list of assets (home, cars, savings, investments, etc.) and a list of liabilities (mortgage, student loans, credit card debt, and so forth.) Each category should be totaled. Next, subtract the total value of your liabilities from the total value of your assets. The dollar amount remaining is your net worth. If you owe more money than your assets are worth, your net worth will be a negative number. This is not unusual, particularly for younger people who are just starting out. It's important to remember that calculating your net worth will give you a broad picture of your overall financial situation. It is not precise enough to help you deal with specific problems, such as a layoff or loss of income.

Once the net worth has been calculated, the next step is to formulate a budget. This is where you will find areas where you may be able to adjust some of your spending to better cope with the current emergency. In order to construct a budget, you should:

  • Estimate your monthly take home income and expenditures: Make a list of your income and expenses. If you don't have this information, make your best guess. The goal is to give you some idea of where your money is going.
  • Journalize your spending: Keep a record of all of your purchases, even those on credit. Carry a pen and paper with you and write down the date, store, amount, and what you bought. This will help you find areas where you can reduce spending on non-essentials.
  • Periodically review your progress: Take some time to review your spending journal after about a month. If you have been able to make changes in your spending habits, adjust your budget to reflect these changes.

Here are a few ideas that could help you cut some of your expenses.

  • Utility budget plans: These are designed to give you a consistent monthly payment on your utility bills. Call your utility providers for details.
  • Ask for higher deductibles on your auto and health insurance plans: This can reduce your monthly premium payments. Also, many insurance companies offer discounts to customers who purchase more than one type of policy. For example, if you buy your homeowner's insurance from XYZ Insurance, they may give you a better rate on car insurance.
  • Downgrade your cable TV package: Eliminate channels you don't watch.
  • Review your phone bill: Eliminate unnecessary extras such as call waiting.

Use All of Your Resources

Although it's true that losing a job is a difficult thing, don't panic. Take a step back and really think about the resources you may have at your disposal. Your family and friends may be able to help. You may have cash or assets that can be liquidated easily to get you through this emergency. After the initial shock of the job loss passes, it's important that you seek solutions calmly and rationally.

If you have been lucky enough to receive a severance package or have a substantial amount of money saved in an emergency fund, you should consider "pre-paying" some bills. Many recurring bills can be pre-paid, including mortgages, property taxes, insurances (home, vehicle and life), and loans (such as student loans). Travel expenses such as tolls, registration, parking and public transportation can also be paid in advance. Pre-paying these expenses will help to alleviate some of the monthly expenses while your spouse is looking for a new position. Pre-paying will also help to reduce the temptation to "over-spend" the money slated for emergencies.

Update Your Resume

Now is the time for both you and your spouse to update your resumes. If you are happy with the format that you are currently using, then just make sure all of your information is accurate and up to date. If you want to change the format, there are many on-line resources available to help. Some of these include:

Stick Together

During a situation like this, it is more important than ever for a couple to stick together and stay positive. "The power of positive thinging" can be a very strong tool. If you or your spouse are unemployed and frightened about what might happen, positive thinking is crucial to helping your relationship survive. Discuss your fears with your spouse; chances are that their anxieties are similar. Most of our fears stem from "the unknown." During a period of unemployment, just about everything falls into the category of "the unknown." Take each fear individually and look at the worst-case scenario. Can't pay the unsecured bills? Well, what's the worst that can happen? If things get really bad you may find yourselves considering bankruptcy, but that's why it's there. Is it the end of the world? No, it's not. Try to remember that almost every problem has a solution. A Family is a team. Try not to argue with each other about things that you have no control over. Make your decisions based on what is best for the family. Eventually you'll find yourselves back on your feet again.

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