The consequences of a job change can be financially daunting: A Wall Street Journal analysis estimated that over 80 percent of people who switch jobs usually find themselves worse off financially compared to when they were employed. But there are ways to try to mitigate the losses:
1. “Mortgagee Loans” — These are pre-approved loans from an insurance company that will reduce the mortgage bill if your job change results in at least 10 percent less income than before. Loan officers say such loans are available from up to 45 percent of lenders. “At least there’s something there that gives you some protection,” says Hetty Rosenstein, the founder of career networking site Vault.com.
2. Career counseling — Begin networking with companies and organizations — they can often offer good reference-gathering advice and job resources. “Most of us have those old friends who advise us the way to get ahead,” says Stacey Bremin, a career coach in Boulder, Colo.
3. If necessary, use an insurance benefit — leaving work early due to illness, a divorce or the like can save you money. Meanwhile, if you have severance money left over after you lose your job, invest it in your own funds or in a no-interest loan from the Internal Revenue Service.
4. Pay off debt — If you have credit card debt, or mortgage or student loan debt that is due in the months ahead, start tackling that first, says Katie Hawley, a general manager at American Business Assistance Corporation, which helps companies through financial emergencies. You might even consider refinancing, or converting, your student loan to a less expensive one.
Read the full story at The Wall Street Journal.
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