How Do Job Search and Financial Literacy Correlate?
Unemployment can occur for many different reasons, whether it’s recent grads trying to enter the job force, people looking for a career change, or others who are unfortunately let go for one reason or another.
Whatever the reason may be, one skill that’s important to have is financial literacy. Being financially literate means having a set of skills and knowledge that allows you to make informed and effective decisions with your financial resources.
While you’re looking for a new job, use financial literacy skills such as budget plans and credit knowledge to make smart financial decisions. These skills can come in handy whether you’re still looking for a job or just starting your new career.
Follow a Plan
No one knows for sure how long it will take to find a job. It can depend on a number of factors, like your field of work, experience, and personal goals. Some might find a job in a matter of weeks, or it may take months.
With so many uncertainties in mind, following a financial plan when unemployed should be a priority. Most unemployed people won’t be earning anything at all, but still likely have bills to pay. Take a step back and see how much money you currently have to develop a budget for a period of time. Experts suggest creating a six month plan, since it’s better to plan for a long time out of work to be on the safe side. If you find a new job before the six months, you can re-evaluate your budget for your new income.
After you’ve developed your plan, stick to it. At the end of every month, review your spending to see what can be cut out for the next month. Try and resist any cheating on the plan, but remember it’s ok to make changes to your budget as you see fit during this period of unemployment. Again, it’s better to cut too much from the budget at first rather than not enough.
Credit cards must be used with discipline. It’s the same advice for those who are unemployed and those who landed their first salary or have been in the same job for a while. Credit cards are important tools that help shape your future, as they build your credit history. Credit history is reviewed when you apply for apartments, jobs, and other loans.
When you use credit cards in your monthly budget, they’ll usually offer additional rewards and benefits. Remember to be mindful while shopping with your credit card, though. If you’re not paying the balances off in full and on time then the benefits are overshadowed by expensive debt.
No matter the reason for your unemployment, you need to implement a financial plan while looking for a new job. Developing a plan will result in mindful spending and financial stability during a time where you don’t have a lot of income. If you’re planning to use any of your credit cards, make sure you understand how they work and avoid overspending.
Keep in mind that unemployment doesn’t last forever. Sticking to your budget will help you get through any tough times, and you’ll develop great financial habits as you land your dream job!
By: Jacob Lunduski, Credit Card Insider