Q: For people who live on a budget and are now unemployed, what can they do, other than look for a job and cut unnecessary expenses, to make it through this horrible economy?
Los Angeles, CA
A: I’ve been working with a few folks who are unemployed, and it’s tough. It’s tough to watch them struggle. It’s tough having to advise them to cut out anything and everything that makes life comfortable and fun, such as eating out, watching cable or going out to catch the latest star-studded blockbuster movie.
I’ve consoled people when they didn’t get a job that would have ended their having to live on next to nothing.
But here’s what I know. Even when you think you’ve done everything to make it through until the next job, you have to do more. You have to sometimes do what may be uncomfortable such as:
- Move. If you are unemployed, you may have to take in a roommate or move and live with a friend or relative. If you can cut out or significantly cut down on your housing expense, it will relieve a lot of your financial stress.
I recently advised a divorced mother of three to give notice to her landlord and move in with a friend. She just can’t afford to live on her own anymore. She didn’t want to do it. She still wanted the privacy and peace of having her own place. But that was just costing her too much. She’s still on the hunt for a full-time job, and the expense of an apartment or house is just too much. So, she let go of her pride and is moving.
- Apply for public assistance. I’ve seen people who once earned six-figure salaries humble themselves and apply for food stamps. People are seeking public medical insurance for themselves and their children. These programs were created to help during times like this, so take advantage of them. Hopefully, it’s only temporary.
- Take on a number of part-time jobs. Rather than hold out for the full-time job that hasn’t come yet, take on as much part-time work as you can find. It’s not ideal, but you have to do what you can to bring in some money.
- Stop paying certain debt. Call your creditors, explain your situation, and see if you can get a forbearance–meaning a temporary reprieve from paying. If you can’t, don’t make paying these debts your priority. If you have a choice between buying needed groceries and paying a credit card bill, get the food. Your priority is food, shelter and utilities. Or, at the very least, only make minimum payments on your unsecured debt.
- Don’t use credit. I know times are tight, and you see your credit card as a way to fill in the financial gaps. But it’s a trap. Think about it. You will be charging for stuff with no idea how you will be able to pay it off. That only makes your situation worse.
- Ask for help from your community. If you have been a faithful member of your church or religious organization, find out if there is a benevolent fund. These funds are set up to help members in financial trouble. You may find that your church will help you with your utility bill or rent for a few months.
The most important thing is to keep the faith. As bad as things get, try to keep your spirits up. I mean this. Being unemployed and having to worry about money can drag you into depression. Find someone to talk to, either personally or professionally. Do what you can to keep depression at bay.