Being unemployed can be extremely demoralizing and upsetting. Sometimes, the best thing to do is focus on surviving unemployment- don’t force yourself to thrive. Focus on ways to survive unemployment and getting through it as best you can.
How to Survive Unemployment
We are currently in what looks to be a recession, with unemployment rates as high as the Great Depression. Chances are, many of you are unemployed, furloughed, and maybe facing extended unemployment. While I’m currently still employed (with reduced hours), I have unfortunately been unemployed before. Here are ten tips that I used to survive unemployment and will hopefully help you survive financially while unemployed or at the very least mitigate unemployment damage.
How I Survived Unemployment
I have never lived through a Depression, and I was not in the workforce during the last recession (My father did lose his job, which was a challenging time for our family. I was not involved in any of the financial discussions, though). I have been unemployed, though. Some of my experiences are not the same. For example, the chances are that we are in this for the long haul. Whole industries are being upended, and the long-term ramification will be felt for a while. However, I do have some tips that can apply regardless of the terms of unemployment. Recession or no recession, the rules remain the same.
How to Survive Financially while Unemployed
While you are unemployed, you need to readjust your priorities and goals. While you may want to thrive and do well with your finances (save money, get out of debt, etc.), those aren’t realistic or practical goals. Focus on surviving financially while you are unemployed. This means mitigating the damage and trying not to get into situations where you will be fixing your financial problems for years to come. Focus on survival instead of thriving.
10 Tips to Survive a Layoff Financially
- Apply for all the help you can get. Unemployment, Medicaid, Food Stamps, WIC, and other programs are a safety net designed to help you get through periods like this. Other countries have many programs as well. Although the paperwork and bureaucracy can be daunting, it is worth getting as many of the benefits that you are entitled to as possible. Remember, every little bit can help you close the gap and mitigate the damage.
If you have moralistic views about “not taking handouts,” you can write down every penny you got from every program and make a commitment to pay it back when you can. These programs were created to help people, and in a practical sense, taking money or aid from these programs will not take money from someone else’s pocket.
- Look to lower your costs. The three highest costs that most people have are usually housing, car, and tuition. Unfortunately, those three are also the hardest to reduce quickly, even though they will net you the biggest savings. Start by cutting out smaller items and really think about the high costs in your life. This is the time to realize that you may have to make some significant lifestyle changes if you are in this for the long haul and have minimal savings. Participial now is a good time to rework your car options as you can do with fewer cars for the next few weeks or so.
- Lower your bills. Call every service provider and see if you can negotiate or just plain ask for a better deal. By taking advantage of a promotion, we could get better internet for $5 cheaper a month. Again, not major savings but every little bit counts. You can get some good savings from bills that are usually higher. Now is also an excellent time to determine the exact details of what forbearance or grace periods are available to you. Many mortgage companies, insurance companies, credit card companies, and student loans have a system for this specific situation. Not all the terms are the same so make sure you know exactly what you are signing up for. While your student loans may just put a pause on payments, your mortgage company may require you to pay the whole amount in a few months. Knowing all this info can give you some idea of which bills you can push off without causing major damage.
- Stop paying the debt. Paying off debt is a great goal and a great way to change your financial future, but unless your debt is predatory, consider putting a pause on all debt repayment plans. Pay the minimums, if you can, to make sure that you don’t go to collections, but save all aggressive plans for when you have a job. If you can still afford to make payments on bills for now but are not sure if you will be able to in the future, then consider taking the money you would be spending and saving it in a High yield savings account. When you get re-employed, you can just take the whole chunk and throw it at the debt. However, in the meantime, you will have some cash to fall back on.
- Rework the budget. Now is the time to really get creative and see what you can cut or pause. Some people don’t believe that saving small amounts of money will help but as someone who has had to count every dime- trust me- it helps. Cut what you can. Get creative with what you can.
- Get what you can for free. You have to give up some private information for this but try to see what you can get for free. Many companies offer free samples or even sometimes free items in exchange for some personal information. You can even make a new email address specifically for these promotions to avoid too much spam. Hip2Save, Slickdeals, and Reddit are all great places to look for free items and swag.
- Sign up for free trials. Netflix, Hulu, Amazon are all companies that give a free trial. These are great ways to get things for free that you would ordinarily pay for as long as you remember to cancel them! Set a reminder on your phone or write it down on a calendar so you won’t forget.
- Rewards and coupons. Sign up for all the rewards and cashback apps that you can. For example, Ibotta gives you cashback on certain items when you scan your receipts. Again. A little bit of money, but we are all about stretching the dimes! Sign up for every store reward program (not credit cards but the free rewards programs that offer points). Don’t be tempted to spend more to get the rewards; you will get them when you get them. Don’t forget to check coupons or deals before doing any purchasing.
- Choose the right poison. The fact is, bills have to be paid, and food has to be eaten. We are lucky enough to live in an age where credit is easily available to us, albeit at a steep price. If you have to feed your family and there is no money coming in, you will have to put things on credit. This should not be in an invitation to spend freely. Everything you borrow, you will need to pay back at one point. But you can, and should, pick your poison correctly. Certain credit cards offer 0% interest rates for a certain amount of months. Selecting a card like that can help you borrow money at no cost. (You don’t need a great credit score to get a credit card. Here are some credit cards for Fair Credit score).
IMPORTANT CAVEAT: When those months are up, you will usually be hit with a huge interest rate that usually compounds from the card’s start date. Therefore, you need to make sure that you can either pay when your 0% runs out or transfer it to a different card with a low-interest rate. THIS IS A VERY DANGEROUS GAME. Please only do this if you are desperate and don’t have a choice. Playing with credit cards can backfire massively and cause a lot of financial harm in the future. Don’t fool yourself into thinking that this is not poison. It is. Just pick the poison that will do the least amount of damage.
- Know your rights. Unfortunately, even with the best efforts, there may be a time when you just can’t pay your bills. Know your rights when it comes to bill collectors. Simple google searches can tell you that many bill collectors often don’t follow the laws and regulations for getting their money. When you know your rights and the laws associated with your debts, you can stand up for yourself. Track every interaction and keep meticulous notes. This note-taking will help you if, g-d forbid, you end up in court or with a judgment against you.
Hopefully, these ten tips of how to survive unemployment will not have to be used by many of you. You will either find a job soon, or you will be able to eke by with these tips and by pulling in small amounts of money online or from various other side hustles. Remember, you want to survive a layoff with your finances intact, but the most important thing is to survive and live to see another day.
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Have you been laid off or furloughed? Have you ever had an extended period of unemployment? How do you plan to get through this? How did you manage to get through it? Let me know in the comments!