MILWAUKEE -- As unemployment skyrockets, stress is mounting as people worry how they can stretch their dollars. Financial advisor Brad Allen joins FOX6 WakeUp with some tips on making ends meet without a paycheck.
So what can people do?
1. Adjust your budget. A budget is key to feeling financially secure right now and determining if you can make ends meet.
Write out your new budget. List all your expenses, including fixed expenses like your mortgage, car payment and cell phone bill. It should also include variable expenses, such as utility payments, groceries and entertainment. Check out a budget worksheet at wealthwisconsin.com.
Then determine how much income you have coming in. This might include your unemployment benefits, your spouse`s paycheck and any severance you may have received from your employer.
If your expenses outweigh your income, you`re going to have to take a hard look at where you can cut, even if it`s temporary. Your gas, entertainment and dining out expenses are likely lower right now. But you might also have to consider other cuts, like your cable bill or pausing subscription services.
2. Review Your Savings
Times like this highlight the need for an emergency fund. I recommend having 3-6 months of expenses saved in a separate, easily accessible account. This money should only be used for an emergency, like an unexpected lay off or medical bill.
If you don't have that much saved right now, take a look at what you do have. The new stimulus bill allows those under the age of 59 ½ to take a distribution of up to $100,000 from their 401(k) without paying a 10% penalty.
The bill also lets you take a loan up to $100,000 from your retirement plan, which is double the amount you can normally take.