Dealing with finances is tough enough even when you’ve got a job, but unemployment only complicates things further.
If you find yourself in this situation, don’t lose hope! There are some best practices that you can follow to make this season of unemployment as financially stress-free as possible.
Stay calm and do what you can.
Take a deep breath. If you’ve got an emergency fund, now’s the time to use it. Either way, make sure you apply for unemployment with the government. This is what it’s for!
The first step to managing your finances on a tighter budget is cutting out unnecessary spending. Make a list of essentials (groceries, rent, water, electricity, etc.) and then make another list of things that do not count as necessary (new clothes, eating out, extra groceries, etc.). Make a weekly budget that includes only the essentials and make it clear to everyone in your household that this will be the procedure until you find work.
Erase the word “debt” from your vocabulary for now.
If you’ve got debt, now is not the time for you to make payments. If you’re not in debt, refrain from taking out loans or credit cards unless it is absolutely necessary for your survival. Use the resources that you already have (excluding your retirement) so that when you come out the other side of unemployment, the high interest on your debt won’t make your finances even worse.
This will be difficult, but avoiding debt while unemployed means that you’re using your money to care for yourself and your family.
Do what you can for extra money.
If the situation becomes desperate, there is no shame in taking a job you wouldn’t usually consider. (Minimum wage is better than no wage, after all!) What matters is that you are able to support yourself and your dependents, even if it means having a little less time to apply for jobs like your last one.
If possible, find a temporary or part-time position within your field to get more experience. This will show that you’re hardworking, even in difficult circumstances.
Another option is to monetize your talents. If you like to make crafts, start an Etsy store. If you can write well, take on some freelance work. You may find success in becoming your own boss, and at the very least, your future employer will be impressed by your entrepreneurial spirit.
Keep track of your spending.
The hard truth about unemployment is that it’s never completely clear when it will end. Unemployment can last a few months or even a year, depending on the economy and the type of job you’re qualified for. Because you need to plan for the worst, you’ll need to know exactly where your finances are going.
If you’ve already been tracking this, great. If not, start writing down each cost and what it paid for. This will help you see where you can cut back further and what is already at an absolute minimum. These insights will help you learn and grow into a wiser spender, a lesson that you can use into your next job and beyond.
Unemployment is tough, and unemployed finances are tougher. Hopefully, you found some encouragement and suggestions that will help you in this difficult journey and how to help manage your finances.
If you’re currently unemployed and discouraged about your own career path, we can help. We offer workshops for people with difficult-to-explain work histories, and our team of career experts can help get you back on track. Click here for more info.