How to Survive Unemployment


survive unemploymentDownsized? Laid off? Those are terms all too familiar to many families during periods of economic turmoil. With companies making staff cutbacks, families face navigating their own financial disasters. Unemployment isn’t the end of the world, however. Here are a few ways to survive unemployment.

Create an Unemployment Budget

If you suddenly find yourself unemployed, draft a temporary budget immediately. This gives you a full overview of your financial status so you can prepare for making ends meet while you’re out of work. List your savings, other income – no matter how small – and all your monthly expenses. Will you receive severance pay? Does your spouse or partner work? Can your spouse pick up extra hours? Figure out exactly what you’re missing for staying afloat.

Look for Freelance or Temporary Work

While many companies are laying off employees, there are also many looking for freelance or temporary help. Contractors aren’t subject to the same rules and guidelines as regular workers, so enterprises avoid paying unemployment tax, providing health insurance coverage, and other overhead costs. Freelancing gets many professionals by between jobs.

Make Sound Investments

Making sound financial decisions, like investing, while you’re employed helps you cope with temporary periods of unemployment. Profits from investments you made years before are often enough for getting your family through difficult times. Online resources, like FI’s Market Minder, are valuable for learning about making smart investment decisions even if you don’t know much about financial markets.

Sell Stuff You Don’t Need

You probably have old electronics lying around that you haven’t used in years. Sell them on eBay, Craigslist, or on other sites like BuyMyTronics.com. If listing them online and shipping them isn’t appealing, sell your used stuff to family and friends or have a yard sale. Clothing, old DVDs, furniture, fish tanks, and plenty of stuff you don’t give a second glance is a great buy for someone else. The small amounts of cash you earn could pay your electric bill for a month or two.

File for Unemployment

Not every laid-off or downsized employee is eligible for unemployment, but it’s one method for earning a percentage of your previous income if you meet eligibility criteria. Regulations and benefits vary by state, but generally if you’re fired for a good reason you don’t qualify. However, if you’ve been laid off or let go for no fault of your own, you’re probably eligible for some unemployment benefits. What you earn through unemployment won’t equal your former paycheck, but it helps pay the bills in the interim.

Make Logical Budget Cutbacks

Enjoying the same luxuries you had while earning a regular paycheck probably isn’t possible when you find yourself unemployed. But unemployment is temporary, so make some temporary sacrifices while you look for a new job. Quit the gym and start jogging, or do yoga at home. Things like dining out, premium cable channels, and other entertainment are easy areas for reducing expenses. Also look at cutting expenses you carried related to your job, like a more expensive mobile plan if you used your personal device for work purposes.

Save Everywhere You Can

Cutting coupons isn’t just for the savings-obsessed. Cutting your grocery bill in half is entirely possible by taking advantage of in-store savings, like double coupons or buy-one-get-one-free sales, and using coupons as much as possible. Sign up for rewards programs at your local grocery store and maximize your savings.

Start a Business

If you’ve dreamed of starting your own business, start digging in now. You can continue looking for a new job in the meantime, but why not take steps towards your dreams while you have the extra time? Technology reduces the barriers to entry for many industries, such as publishing, so accomplishing your goals is probably easier than you think. If your business becomes profitable, you’ve created your own job.

Stay Positive

The most important thing when you’re unemployed is staying positive. The world is full of opportunity, and great things often come out of the most unfortunate circumstances. Remember that your situation is temporary, and take action every day towards your goals. Whether you end up launching the next great tech company or you find your dream job next week, there is light at the end of the unemployment tunnel.

Don’t let unemployment get you down or stop you from moving forward. There are plenty of coping mechanisms and strategies for navigating the uncertain path of unemployment. From selling your old electronics and other personal items to taking some freelance work and even starting your dream business, unemployment is often an opportunity in disguise.

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19 Responses to How to Survive Unemployment

  1. Little House 08/19/2013 at 6:53 am #

    Really good tips. I think revising the budget is number 1! It’s a little easier to survive unemployment if a spouse is working, but it’s still difficult given that so many people are vying for the few jobs out there. I’d recommend downsizing for those that may be looking at long-term unemployment.

  2. canadianbudgetbinder 08/20/2013 at 4:44 am #

    A budget is imperative to us all year long but like the other comment says revise it. When we bought our house we did it on one income so in the event something should happen that we were able to still carry the mortgage. This isn’t always the case with everyone so making more money or cutting back in other areas is very important. Great post.

    • Paul 08/20/2013 at 11:37 pm #

      Good point CBB! If I ever found myself unemployed I have a plan to cut expenses drastically until I am able to find a job. Can’t stress the importance of an emergency fund as well!

  3. cj 08/20/2013 at 6:33 am #

    Paul! Hoping we never need this info, but this is a well done post. Love the make hay when the sun shines part where one ought to be making sound financial decisions while things are going well. And love the idea about starting a biz. We started our guitar lesson/tutoring biz in 2005. Even if a few students drop, we have several others and can get more. Now we have started and are starting other revenue streams and investments to try to avoid a total disaster. What a helpful article, Paul! Have a Royal Tuesday!

    • Paul 08/20/2013 at 11:41 pm #

      Hi CJ! Tough subject to write about but so important! I think it’s great that you are able to make some additional income from a passion such as guitar! You have a great week also CJ!

  4. Joshua Rodriguez 08/20/2013 at 8:02 am #

    Hey Paul, great post here. It’s amazing how much money we all have sitting in our houses. All that unused stuff! Selling it is a great idea. I think the best advice you gave here though was to stay positive. I know how hard that can be with little to no money coming in and tons going out but, positivity has a way of working things out. Thanks again Paul!

    • Paul 08/20/2013 at 11:44 pm #

      Hi Joshua! Staying positive is easy advice to give but such a difficult thing to do in such a challenging time in one’s life. Being rejected when looking for a job can make it that much more difficult but having a positive attitude can make a huge difference in how you come out of this temporary situation.

  5. Bryce @ Save and Conquer 08/21/2013 at 8:59 pm #

    Good post. The other thing I would spend a lot of time doing is networking. You get the best jobs not only based on what you know but also who you know.

  6. Beat The 9 to 5 08/23/2013 at 8:30 pm #

    Great tips! I always find creating a budget very helpful when faced with any impending financial difficulties, it gives me a better perspective on what to do and the best way to handle my finances.

  7. Clayton 08/26/2013 at 9:15 am #

    Your attitude to your situation will also govern a lot of your choices. If you think of all the bad things, then you’ll only focus your energies on negative pursuits. On the other hand. If you want to start a business, you’ve got to be positive and determined for a long time. I’d say it’s the best way to go.

    • Paul 08/27/2013 at 6:32 am #

      Very true and very hard to do Clayton! Your attitude has a great impact on how successful your efforts are and those around you. Everyone has been on a team with a “Debbie Downer” and it can really change the dynamics of a team.

  8. Daisy @ Prairie Eco Thrifter 08/28/2013 at 6:26 pm #

    I think if I were to suddenly become unemployed, I would focus first on the cut backs. Businesses can take quite a while to get up and running and become profitable. It’s so, so important to stay positive!

  9. Tushar @ Everything Finance 08/31/2013 at 1:19 pm #

    Unemployment, or the risk of it, is pretty scary. You’ve definitely offered some great tips for surviving it. It can be such a huge blow on somebody’s confidence to become suddenly unemployed.

  10. Marissa @ Finance Triggers 08/31/2013 at 10:09 pm #

    I agree with you on finding a freelance job online like writing or virtual assistance. There are a lot of jobs online. But in order for you to find one, you have to be smart and patient.

  11. Jack 09/08/2013 at 8:19 pm #

    I’m currently unemployed. One of the ways I’m staying positive is by learning marketing and content creation with my (relatively) new blog.

    One great tip – if you are a homeowner, and unemployed, you might qualify for mortgage assistance, at least in California. No one told me about this until I was already married and my wife’s income disqualified me for assistance, but the terms are incredible. I’m kicking myself for not finding out about that earlier. Could have saved myself tens of thousands of dollars.

    • Paul 09/09/2013 at 6:25 am #

      Sorry to hear that you are currently unemployed Jack. Mortgage insurance is another option to pay your mortgage if you find yourself unemployed. Best of luck to you Jack!

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