Assess your financial situation
If some time has passed since you last earned regular income, your finances have probably changed. Whether you’ve spent through your savings or see an increase or decrease in your income as you start your new job, take time to assess your account balances, the total amount owed on credit cards, and retirement savings. It can be intimidating to take stock like that, but it’s an important step toward knowing where you stand as you work to repair your finances after they’ve taken a hit.
Check-in on your credit score
During your audit of your finances, be sure to take a look at your credit score and notice if it’s changed at all. Take stock if your score has gone down, whether because of missed or late payments or because of higher credit card balances affecting your credit utilization ratio. Make a plan to see how to increase your score again if needed.
Rebuild your emergency fund first
If you’ve been out of work for a while, chances are your emergency fund could use a little TLC. One of the first steps to rebuilding your financial health when you’re employed again should be to save up between three and six months' worth of your expenses in an emergency fund. That way if you do lose your job again in the future, you’ll be ready to keep paying your bills and get back on track.
Consider saving extra for retirement
When you haven’t been earning regularly, chances are you weren’t saving for retirement how you might have wanted to. Now that you’re working again, do your best to save as much as possible for retirement to get back on track. Discuss your financial situation with an advisor to get personalized recommendations, but it might be a good idea to max out your IRA contributions for the year. And if your employer offers a 401(k) with company match, be sure to maximize your savings there, too.
Revise your budgets
Your budget has probably changed from the last time you were working, and it’s certainly different than during your period of unemployment. You might have new savings goals you’re working toward or debt repayment strategies to incorporate, and your expenses have probably changed a bit, too. This is a great time to reevaluate your budget. RMCU’s Money Mastermind course can give you a starting point if you’re not sure where to start.
Make a plan to pay off any new debts
If you’ve had to take on a personal loan or credit card debt to get through a difficult time, don’t let that get you down as you work on your financial health now. By having a strategy for debt repayment, like the snowball method, you can ensure you’re keeping up with your minimum payments and minimizing the amount of interest you’ll pay in the long run. You might even want to take out a personal loan to consolidate debt or make a balance transfer to a low-interest credit card to help you save.
No matter where you are on your financial journey, RMCU can help. Whether you’re working toward a savings goal or getting your finances on track, open your account* and unlock the door to your financial future.
*Must qualify for membership. Equal Credit Opportunity. Each account is privately insured up to $250,000 by American Share Insurance. By members’ choice, this institution is not federally insured.
RMCU are not tax professionals.
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