The recession is official over, but many people are still facing the prospect of job loss. If you are recently unemployed, there are important steps you can take to preserve your money and survive unemployment. While you may be tempted to cash out a portion of your 401k, or take out a second home loan from someone like http://www.netloans.co.uk/ don’t do this unless you are at risk of losing your home. Once you take that money out of retirement, it is very hard to build your nest egg back up. Instead, try these tactics:
- Cut non-essentials – We all have extras in our budget that can be cut. Take a hard look at your expenses. What is a need, and what is a want? Cable television and even the Internet, if you don’t use it as a means to make money, are both wants. Groceries are a need, but can you reduce what you spend? Can you shop at a discount store like Aldi or Save-a-lot to get the lowest prices? What other extras can you cut back on?
- Work with creditors – If you have outstanding debt such as credit card balances and fear that you may fall behind in payment, it is best to call the credit card company and share your situation with them honestly. The creditor would much rather put you on a payment plan rather than have you not make payments. They may even work with you to reduce your interest rate. You can also contact your mortgage company and work out a plan with them, if necessary.
- Defer your student loans – If you are saddled with student loan debt, the monthly payments may be more than you can afford when unemployed. If your loan is a Direct Loan through the government, you may be able to change to a different repayment plan such as the income contingent plan that calculates your monthly payment based on how much you make. If that does not offer you enough relief, you can apply for a hardship deferral. However, sometimes the interest owed on the loans continues to accrue, so make sure you understand the terms.
- Barter if you can – Bartering is not as common as it used to be, but thanks to the economic downturn a few years ago, it is making a comeback. If you need something but don’t have the cash to pay for it, say an automotive repair, see if the mechanic would consider bartering with you for something he or she needs. Of course, this won’t work if you visit a chain automotive shop, but if you are dealing with a self-employed mechanic, you may be able to barter.
- Ask for help if you need it – There are plenty of services available to assist those who are unemployed such as unemployment benefits, state based health insurance, and SNAP, just to name a few. Don’t be afraid to ask for help if you can’t make it on your own.
- Find other ways to make money – Having some money coming in is a relief. There are plenty of Internet based work at home jobs. Even if the job is not what you were trained to do for your career, having a bit of money coming in can make the difference between surviving unemployment or not.
Being unemployed can be scary, but by taking the right steps, you should be able to make your money stretch until you get your next job.
What other tips would you suggest for someone who is unemployed?
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Here's how you find out about the community resources: Ask your library if they host, or know of, a community database with links for families in need. Another option that is available in many communities is calling the 211 hotline or looking up its spinoff website that some United Way agencies host. Then every time you talk with a program representative or social worker, ask them if they know of other resources that could help your family. Keep in mind that many of the locally based resources may not be income-based, so you don't have to be "food stamp poor" to qualify! Some of the resources in my county are first-come, first-served; others are meant for special populations such as families with kids, uninsured / underinsured, military families / veterans.