By coinnews 
00:00 Seana Smith
This week on wealth, we’re helping you budget for burnout, walking you through the financial impact if you quit your job or are unexpectedly laid off. Joining me now is money saving expert, Andrea Woroch. Andrea, let’s start with the basics here. If you’re feeling burnt out at work, starting to think about stepping back, switching careers, even taking a break, how much should you have saved?
00:21 Andrea Woroch
Well, ideally, in a perfect world, you should have approximately six months of living expenses saved in a separate account. Make sure it’s out of sight, out of mind. But I know for a lot of Americans out there, having even $1,000 may seem overwhelming in your savings account. So, I would start with smaller goals. Start with one month of living expenses. And to figure out how much that is, you need to list out all those reoccurring expenses that you have, those necessities, whether that’s rent or mortgage or car payment, um, and all those kind of expenses. But you also want to think a little bit beyond the necessities. Are there any of those lifestyle expenses that you don’t want to give up if you get laid off or you want to quit your job? Maybe this is a gym membership, you might need that for your mental health, or hair care services. You want to keep up your appearance for future job interviews. So you do need to build that into your estimated monthly expenses and create that savings goal.
01:25 Seana Smith
What if you’re laid off unexpectedly, and you’re not prepared? What should be your first move?
01:32 Andrea Woroch
Okay. So if you’re laid off and you’re not prepared, you need to sit down and create a budget to make sure that you rid any wasteful spending out of your, you know, out of your spending. Tame those impulse purchases by identifying the triggers. Are, you know, negative emotions can fuel purchases that you really don’t need. So you do need to find those alternative coping mechanisms. I like the zero-based budget method. This assigns a job to every dollar you have coming in. You know, you have to speak with your HR employment to find out if you qualify for unemployment. Perhaps they’re giving you some kind of, um, package when you’re being laid off. And, um, you know, prepare for how to stretch those dollars as far as possible. Also start hacking your monthly bills, call providers, and you want to negotiate rates, compare rates with competitors. Um, there are a lot of things that you can do to lower those monthly expenses. Um, and then, of course, look for ways to supplement your income. Maybe there’s a side hustle you could take on. This is like pet sitting or virtual tutoring. There are sites like taskrabbit.com or Handy where you could find odd jobs in your neighborhood just to keep up with some additional income coming in. Um, and then, you know, these are just some of the things that you could be doing to give yourself a little flexibility.
03:17 Seana Smith
And if you are unemployed, how do you balance saving versus paying off maybe debt, like student loans or your credit card bills?
03:27 Andrea Woroch
Yeah. So when you are laid off or even if you’re planning for that emergency fund, and you don’t have enough cash set aside, you really do need to focus towards savings first. But at the same time, you don’t want to let that interest pile up on any debt that you are carrying, like a high-interest credit card, right? So what you would do is use a balance transfer card for credit card debt, move the money from your current credit card that might have 20% interest or more to this new credit card, which will offer 0% for 12 to 21 months. This will buy you time to make just those minimum payments without that interest adding up. So you could put more towards savings or, you know, at least pay your bills without feeling stressed about that credit card bill. And then when it comes to student loans, call your lender, they should be able to give you, um, some deferment because you are experiencing financial hardship. And if you own a home or own a car, find out if there’s anything that you can do to defer those payments as well. I mean, that’s not ideal ultimately, because the interest will still compound to your loan, and you will owe that more down the road. But if you really can’t make ends meet, those are options so that you don’t, um, you know, get into a worse financial position. And then when it comes to your savings account, I did want to mention that it’s a really good move to open up a high-yield savings account because these accounts offer 4% or more in interest. So now your savings will earn a little money for you. That’s like passive income, you earn without having to do anything. And a great example is Bread Savings. They offer 4.3% annual percentage yield. Only $100 required to open an account that’s compounded daily, deposited into your account at the end of the month. So just a no-brainer move to, um, take advantage of that.
05:49 Seana Smith
Andrea, some great advice there. Thank you so much for your time. Appreciate it.
05:53 Andrea Woroch
Thanks for having me.