To better manage your finances while job hunting you will need to do more than just stick to a budget. You need to reduce expenses and spending.
The U.S. Bureau of Labor Statistics’ recent economic report announced some tough, though perhaps unsurprising, news: the recent surge in COVID-19 cases has led to the loss of 140,000 jobs in December, the first decline the country has seen since April 2020.
For many, that means budgets are a little tighter these days — especially if you’ve been struggling with months of joblessness. These tips can help you rethink your spending and debt strategies and manage your finances while job hunting.
10 tips to help you manage your debt and spending
- Accumulating more debt should be a last resort
- Use cash.
- If you do use cards, don’t spend more than you actually have.
- Hit “unsubscribe.”
- Sleep on it.
- Buy only what you love.
- Shop around.
- Save on groceries.
- Use technology to your advantage.
- Ask yourself if you can DIY it.
10 tips to help you manage your debt and spending
1. Accumulating more debt should be a last resort
According to a recent survey, almost a third of respondents expected to go into debt due to holiday shopping — and that’s one terrible gift to give yourself for 2021.
Worse: That number increased to 47% among those furloughed or laid off earlier in the year due to the pandemic. Finding a new job is frustrating enough, and giving yourself a ticking debt bomb doesn’t help alleviate any of the stress.
While going into debt may be necessary in some situations, avoid borrowing for unessential items. It’s time to get serious about your needs vs. wants conversations — until your employment is secure, be honest about whether or not you need new clothes or a new TV.
2. Use cash
Most of us know from experience: it feels more difficult to part with cash than credit, somehow. Maybe because actually counting out bills is a lot more tangible than simply swiping a card.
But either way, research has long suggested that using plastic rather than paper increases “willingness-to-pay” — by up to 83%. Even the mere presence of a credit card logo can increase spending up to 10%, regardless of which payment method is chosen.
Thus, simply forcing yourself to use cash rather than credit may help you naturally cut down on your overall spending. And this helps manage your finances while job hunting.
3. If you do use cards, don’t spend more than you actually have
Even though cash may lead to spending less, most of us are pretty devoted to our plastic. According to the most recent Diary of Consumer Payment Choice, debit cards are the first choice of payment method, closely followed by credit cards, which account for 29% of in-person payments.
Unfortunately, it’s all too easy to ding your credit history by carrying revolving credit card balances. Since some employers take your credit score into consideration when determining whether or not you’d be a good fit for their company, it’s crucial to keep your score in tip-top shape during a job hunt.
The solution? If you’re going to use credit cards, be sure you’re able to pay them in full and on time each and every month. That way, you’ll get all the benefits without paying hefty interest fees.
4. Hit “unsubscribe”
Given that most of us are under some level of quarantine, window shopping may be less of a temptation these days. But clever marketers have found a way to bring the window to you in the form of email newsletters and text messages. And the online job hunter may be exceptionally vulnerable to these tactics due to the amount of time spent checking email for responses to applications and correspondence with a recruiter.
Although these marketing lists can ostensibly save you money by alerting you of sales events, they can also tempt you to buy items you don’t really need. Besides, unsubscribing from them will also help declutter your inbox — which, along with saving money, is another worthy New Year’s resolution.
5. Sleep on it
Just like when a job offer comes through, even the most tempting purchase can lose its luster after a night (or six) of sleep. Rather than giving in to impulse buys, consider putting your non-essential purchases onto a wish list and seeing whether or not they’re still worth the money to you in a week or two. You might be surprised how much money you’ll save!
6. Buy only what you love
As a corollary to the above suggestion: When you do make purchases, ensure that you love them enough that you won’t have buyer’s remorse in a month or so. The wish list idea is a good tactic for achieving this, but it also comes down to being brutally honest with yourself in the moment.
For instance, maybe that new pair of boots is gorgeous, but are they actually comfortable? If you’ll never wear them, what’s the point of spending money on something that’s just going to sit in your closet?
Read Need versus Want
7. Shop around
If your heart and mind are set on a particular purchase, it might be worth shopping around a bit before you pull the trigger (or hit the “add to cart” button, as it were). You may be able to find the item for a better price from a different vendor, or wait for the item to go on sale.
8. Save on groceries
No matter what other expenses are taxing your budget, you’re always going to have to buy food — and there’s a huge range in how much you might expect to spend on groceries monthly. The USDA’s latest Cost of Food Report shows that a family of four with school-aged children might pay as little as $668.50 per month or as much as $1,332.40, depending on how they go about their shopping.
Those numbers mean there’s likely space for you to save on your grocery budget by doing things like coupon clipping, meal planning and shopping at less-expensive supermarkets. It may take a little bit of effort upfront, but becoming a savvy grocery shopper can lead to sustained monthly savings.
9. Use technology to your advantage
Along with raking the print flyers and catalogs mailed to your house for coupons, you can also take advantage of digital deal-finders and technological tools. For instance, rebate apps like Checkout 51, Shopkick and Ibotta allow you to earn cash rewards and gift cards for purchases ranging from groceries to retail. Reduce your finances while job hunting by finding and using discount coupons.
10. Ask yourself if you can DIY it
Finally, you may be able to forego a purchase altogether if you can DIY a solution instead, whether that means repairing an appliance yourself using YouTube or mixing up your own exfoliating skin scrub. (Just keep in mind that purchasing the ingredients and tools you need can sometimes be expensive in its own right.)
Author bio: Joshira Maduro is a content market research analyst at LendingTree, where she supports content covering credit card news and partnerships. She utilizes her background in market research and branding to develop insightful pieces on better ways to spend.
LendingTree is an online lending marketplace that allows potential borrowers to connect with multiple loan operators to find optimal terms for loans, credit cards, deposit accounts, insurance, etc.