Financial Guide for the Unemployed

Many of us are currently dealing with financial and/or economic challenges. One devastating problem that some of my neighbors and friends have recently faced is unemployment. Surviving with one less source of income due to a job loss can cause a lot of financial and personal stress.

As of right now, the Bureau of Labor Statistics estimates that approximately 15 million people are unemployed. That means you or someone you know has probably suffered a decrease in income due to job loss.

What are some ways you can deal with unemployment? How can you help your friends?

Analyze your financial situation

You will feel better and increase your odds of success if you can visualize your new cash flow on paper. This may be a difficult step, but it will give you a clear picture of where you stand. Remember, the goal is to get a workable plan to keep your family afloat.

Ask all the tough questions now rather than later.

Are you getting a severance package? How long will the money last? Can you maintain your health insurance, perhaps by using COBRA? Or do you need another option? Perhaps you can switch to your spouse’s plan?

How much are your monthly expenses? Figure out what is essential for your bills and start cutting what you can. Do you really need cable? Can you adjust your cell phone bill? Have you tried services like Bill Shrink and Mint to see if you can find more ways to save money? Can you shop more frugally for your essentials?

For example, when buying groceries, could you buy ingredients to allow you to cook meals from scratch rather than using ready-made meals? Cooking homemade meals tends to be cheaper than pre-made food. It could have a significant effect on decreasing your grocery bills.

Develop a financial plan while you’re in between jobs

Use all of the resources available to you

If you can legitimately claim benefits that you’re entitled to, such as unemployment compensation or state insurance benefits, take them. It’s a temporary fix, but it can help take some pressure off as you find your next job. Reducing your monthly expenses can help while you’re looking for your next job.

Find a part-time job while you’re hunting for work

If you can work some flexible part-time jobs, you can alleviate some of the financial burden.

Getting a part-time job can help as you still need to have some available hours for job hunting and interviews. Some flexible part time jobs you may consider include:

• Pizza delivery
• Barista
• Hotel/hospitality
• Call center customer service rep
• Waiter/waitress
• Retail work
• Private tutor
• Bank teller

The idea is to offset some of the income lost as you get back on your feet. Double check with your state’s employment agency to see how your part time job will affect your unemployment benefits.

Avoid credit cards

It can be extremely tempting to use your credit cards as part of your bill pay system, but you should avoid this as much as possible. Credit cards should be considered a last resort, as they can add more financial woes to your difficult situation.

Have a game plan for finding your next job

Utilize your network of friends and family

There are many job openings that aren’t published online or in the papers. Take advantage of your connections and ask friends and family to keep their ears open for any opportunity that would be a good fit for you.

Ask your former manager for a letter of recommendation

If you were a great employee and did not burn bridges when you were laid off, it could help if your supervisor could write a letter of recommendation.

Visit your state’s employment agency

Many state employment agencies offer resume and cover letter help. If you’re hoping to bounce back quickly, it certainly helps to have your best foot forward. And if you’re in a creative arts type of career, make sure your portfolio is updated.

Decide on what you’re looking for in employment

As you work towards the next step in your career, be open to trying different things in your field. Perhaps your skills can be used in a different (and perhaps more stable) industry. Sometimes you can find a better job after you lose your current one.

See if self-employment is for you

You may want to venture out and start earning money on the side. Use this as an opportunity to test the waters by taking some temporary assignments.

Your thoughts

I’m interested in hearing your thoughts about how best to handle a job loss. Do you have a plan in case you get laid off? Have you ever survived a job loss? What helped you to keep your finances in order?