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How Can I Pay My Bills When I Lost My Job?

By Sarah Li Cain · June 21, 2022 · 9 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

How Can I Pay My Bills When I Lost My Job?

If you lose your job, it can be challenging to pay your bills, but in many situations, it can be done. Sure, unemployment can feel overwhelming and scary, especially when it comes to figuring out how to pay your bills without your usual paycheck. It’s one thing to temporarily give up on dining out, but it’s another to miss your mortgage or rent payments and risk not having a place to live. Same goes for other necessities such as utilities and transportation.

The good news is that there are ways to manage your finances effectively after you’ve lost your job. Here, learn more, including:

•   Which bills to prioritize.

•   How to create a survival budget.

•   Where to access money until you find a new job.

What Bills Should I Prioritize?

If you’re unemployed, you may wonder how to pay your bills without a job. In this situation, it’s crucial to prioritize certain ones to make sure you can meet your basic necessities. This means looking at your list of bills and determining ones that should be at the top of your list (or close to it). In addition to the bills that keep your daily life running, you also want to consider the damage unpaid charges can do to your credit rating. The goal is to balance these factors with the funds you do have available.

Bills you should probably prioritize include:


Having a roof over your head is important for you and those who live with you, so contact your landlord as soon as possible to discuss alternative payment arrangements. Perhaps you can negotiate lower payments for a window of time. Otherwise, if you don’t communicate and don’t pay, you could find yourself facing eviction.

Mortgage Payments

If you have a home loan, falling behind on payments can have serious consequences, one of which is foreclosure. Non-payment can lead to default and the bank has the right to recoup their property (aka the home) and sell it to attempt to make back the money it lost. If you’re wondering what to do about loans when you’ve lost your job, contact your lenders as soon as possible. Many offer forbearance or alternative repayment programs.

Student Loans

Falling behind on student loans could mean you’ll go into default. In some cases, the lender may have the right to garnish your wages. If you’re handling student loans during a job loss, consider applying for an income-driven repayment plan for federal student loans or contacting your private lender to see what options are available.

Car Loans

You’ll most likely need your car to run errands or look for work. Staying on top of payments for your loan or lease can help ensure you won’t risk having your vehicle repossessed.


Non-payment could result in denial of coverage, which might not be helpful if you need to see medical treatment or are in a traffic accident, for instance.


Not paying these types of bills can result in your electricity, water, phone, and internet being shut off. These are obviously vital for daily life and, in terms of connectivity, job hunting.

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How to Create a Survival Budget

If you’ve lost your job, it’s important to create a survival budget to help prepare for the lean times ahead. This type of budget only takes into account the bare necessities with whatever savings or income sources like unemployment benefits you currently have.

The main goals of a survival budget: to ensure you and your family are taken care of, and then turn your attention to any creditors as necessary. What this means is that even without a job, you pay the bills that will ensure you can survive first — such as food and housing.

To start, look at all of your current expenses and eliminate anything that isn’t really and truly a necessity. For instance, you can’t get rid of your food expenses, but you can temporarily cut back on dining out. Cook your meals instead, and ditch your takeout coffee habit for now. If you have a cell phone, you can consider downgrading your service for a cheaper plan to save some money.

Look at the funds you have available for the next couple of months as you job hunt. Deduct the priority expenses, and then evaluate what is left and how you can budget those funds. Be strict with yourself: Now is the time to unsubscribe from all those streaming services and save your money for what’s vital.

If you’re not sure if you have enough cash to pay for the necessities and debt payments, it’s best to seek options like forbearance and deferment — negotiate with your lenders to see what you can do.

Where Can I Turn for Money?

Here are some income sources you can turn to when you’re unemployed. It’s hard to pay bills with no job, but these resources may get you through a tough time:

Credit Cards

Using credit cards or even taking out a personal loan when unemployed can be a quick source of funds if you need to make purchases such as groceries and gas. While the interest rates tend to be high, you’ll have a grace period before your balance is due, giving you a buffer to get another income source.

Otherwise, you can make the minimum payment for the time being and make a plan to pay it back once you’re employed again. Also, make contact and see if you can negotiate with your card’s issuing company; you might be able to delay credit card payments. You may also want to explore balance transfer credit card offers, which give you a window of low or no interest.

Retirement Accounts

Tapping into a retirement account like a 401(k) or an IRA is typically seen as the last resort because the downsides typically outweigh the benefits. However, if you’re running out of resources and you have a decent chunk in there, you may not have another choice.

You can choose to tap into your retirement accounts in the following ways:

•   Take out a 401(k) loan: Depending on the terms of your 401(k) plan, you may be able to borrow up to a certain amount — usually up to $50,000 or half of your vested amount — and pay it back within a predetermined amount of time (in most cases, five years). Keep in mind you could face additional penalties if you don’t pay back the loan, such as the loan amount being subject to taxes.

•   Withdraw from your retirement accounts: If you have an IRA or taxable brokerage account, you can make withdrawals. Keep in mind with IRA accounts, you may be subject to a penalty and taxes on the amount you withdraw.

Government Assistance

You’ll want to find out how unemployment works if you lose your job; it can help get some cash flowing your way. Those funds can help you pay for your necessities as you seek other work.

If you’ve been unemployed for a while or face mounting pressures on things like an unexpected medical bill, you may be able to seek other forms of government assistance. To see what you may qualify for, you can search on Benefits.gov, your local state or municipal office, and even local charity organizations and churches.

How Setting Up a Bank Account Can Help You When You Are Not Working

When you’re unemployed, setting up a bank account may seem like the last thing on your mind, but doing so can help. For one, it can help you to keep track of your finances and apply for products such as credit cards and loans if you need these sources of income.

Plus, many banks offer tools to help you budget your money, a useful feature considering you need to watch your money more carefully. These pros of opening an account can make this moment of unemployment a good one to explore your options.

How to Budget and Save with a Bank Account

Here are some ways in which you can budget and save using a bank account when you are unemployed and navigating the job market:

•   Divide money into multiple checking or savings accounts for each type of expenses so you can ensure you have enough money for necessities as well as bills.

•   Set up automatic transfers so you can ensure you’re setting aside money from any income to save or pay bills on time.

•   Set up direct deposit for unemployment benefits or government assistance.

•   Set up card controls or features from your bank to restrict spending.

•   Turn on balance alerts to notify you when your account falls below a certain balance, so you can decide to pause or delay certain purchases.

•   Earn interest with a high-interest savings account.

Alternative Sources of Possible Income

For some people, the above options for money won’t be a good fit; for others, additional funds will be needed. If you have learned how to apply for unemployment and taken other steps to get money but are still seeking other sources of income, consider these options to get cash flowing:

•   Borrow from friends and family

•   Look for work on freelance marketplace sites like Upwork and Fiverr

•   Sell things you own or make online via eBay, Etsy, or other sites

•   Participate in paid market research

•   Look locally for jobs like dog-walking

•   Explore passive income ideas, including renting out your car or your tools.

The Takeaway

Paying bills when you lose your job can feel stressful, but it’s not impossible. Some key steps may include prioritizing your bills and focusing on budgeting for the bare necessities. It’s also wise to negotiate lower or delayed payments where possible and look for other interim streams of income while you look for your next job.

To help you budget carefully when money is tight, consider opening a bank account that offers you higher interest, no fees, and rewards. When you open an online bank account with SoFi and sign up for direct deposit of funds, you’ll have the opportunity to earn a competitive APY, plus you won’t pay any fees, like minimum-balance or monthly. If you’re able to direct deposit $1,000 a month, you’ll enjoy fee-free overdraft coverage too.

Better banking is here with up to 4.00% APY on SoFi Checking and Savings.


What happens to debt when you lose your job?

You are still responsible for your debit payments even if you’re unemployed. However, you may be able to negotiate with creditors and pursue options such as forbearance or partial payment plans. That way, it may be able to to help alleviate some of your debt burden.

What bills should I pay first?

If you lose your job, your priority should be to pay for all the necessities and keep creditors at bay. That means prioritizing your rent or mortgage, insurance, utilities, and food.

How do you budget if you are unemployed?

One of the best ways to budget when you’re unemployed is to create a survival budget. To make one, cut out all unnecessary expenses such as entertainment or dining out temporarily. Work to negotiate with creditors so you’re paying as little in debt as possible, and ensure you are doing all you can to pay for priorities like housing, insurance, food, and utilities.

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Photo credit: iStock/Delmaine Donson

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