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 10 tips that I used to survive unemployment and will hopefully help you survive financially while unemployed or at least mitigate the damage of unemployment.
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 however and that was a very difficult 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, 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
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 that is 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 it to get 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 made to help people and in a practical sense, taking money or aid from these programs will not take money from someone ease’s pocket.
- Look to lower your costs. The three biggest 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 big costs in your life. This is the time to realize that if you are in this for the long haul and you have minimal savings, you may have to make some major lifestyle changes. 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 single service provider and see if you can negotiate or just plain ask for a better deal. By taking advantage of a promotion, we were able to get better internet for $5 cheaper a month. Again, not major savings but every little bit counts. You can possibly get some good savings from bills that are usually higher. Now is also a good time to find out 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 some sort of system in place 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 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. Then when you do 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 very 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 types of 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 to 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 the age where credit is easily available to us, albeit at a steep price. But, if you have to feed your family and there is no money coming in then you will have to put things on credit. This should not be in an invitation to spend freely. Everything you borrow will have to be paid back. But you can, and should, pick your poison correctly. Certain credit cards offer 0% interest rates for a certain amount of months. Picking a card like that can help you borrow money at no cost.
IMPORTANT CAVEAT: when those months are up you will usually be hit with a very large interest rate that usually compounds from the start date of the card so you need to make sure that you are either able to pay when your 0% runs out or you can 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. This can backfire in a very big way 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 one that you may be able to recover from.
- 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 when it comes to 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 will help you if, g-d forbid, you end up in court or with a judgment against you.
Hopefully, these tips will not have to be used by many of you. You will either find jobs 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.
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!