1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

Financial Tips After a Job Loss

Concerned about managing your money while you look for work?

If you qualify, unemployment benefits will help replace a small portion of your normal income for a limited time. Here are some tips for staying financially healthy while looking for work.

Create a personal budget. Review your monthly income and expenses, and use a budget worksheet (684KB, .pdf) to help you create a budget if you don't have one already.

Manage your budget. Cover your basics first. Necessities include housing, utilities, food, work clothes, transportation, insurance, and other bills you must pay. Then identify where you can reduce your spending:

  • Try to arrange for lower monthly payments by telling your creditors that you are unemployed.
  • Trim your grocery bill by buying less expensive generic brands and using coupons. Buy in bulk. Make a shopping list before heading to the store and stick to it.
  • Consider alternative transportation. Cars can be expensive to maintain. They cost gas, insurance, fees, upkeep, parking, and repair. Not using a car, cutting back to one car, or using public transportation could save you money.
  • Reduce or eliminate your phone, cable, and Internet expenses. Contact your present provider. Let them know you are shopping around and ask for their best price. Bundle services, but read fine print before signing up for a multi-year contract. You could be hit with large penalty fees for breaking the contract or changing your services.
  • Cut back on luxury items. Look at your dining, entertainment, hobbies, memberships, household, and personal care expenses. Sell and avoid buying items you don't need.

Save money. It is important to have emergency funds available. Try to save a small amount each month. Consider saving a "basic necessity" in your budget.

Borrow money wisely. If you must take out a loan, you will be charged interest that you must pay back according to the terms of the loan.

  • Don't use loans for anything beyond your basic necessities.
  • Reverse mortgages and home equity loans will remove value of your home with interest. They do affect the resale value if not repaid. If you can't repay your loans, you may face foreclosure or credit problems.
  • Review these basic rules if you must borrow money from friends and family.

Carry health insurance. Medical bills can be very expensive without health insurance. Don't risk it. There are ways to continue medical coverage after a job loss.

Limit credit card use. Use credit cards for emergencies only. Charge what you can afford to pay back within a reasonable time frame. It is easy to get overextended.

  • Avoid transferring balances from one card to another one. Balance transfers often have higher interest rates, often after a low introductory rate. Some cards charge transfer fees. Plus your payments may be applied to the balance with lowest rate balance first.
  • Living beyond your means on credit cards now may cause serious credit problems later.

Increase your income. There are a number of creative ways to make additional money.

  • Part-time jobs may be easier to find than full-time work and will help meet expenses. Turn a hobby or skill into a money-maker. Think about self-employment possibilities. Deliver pizzas or newspapers. Hire yourself out to mow lawns, shovel driveways, run errands, or do home repairs. If you are on unemployment insurance, there are income guidelines for part-time work.
  • Borrow, trade, or barter for items and services you need.
  • Let your family help out. Spouses may be able to find work or increase their hours. Work opposite shifts to avoid daycare bills. If teens are old enough to work and can find a job such as retail, fast food, lawn mowing, or babysitting, they can cover some of their own expenses.

Get financial counseling. There are many local financial counseling resources. They can help you learn how to consolidate debt and manage your budget.

Above all, continue an active job search. Let people know you are looking for work. They can help you network and find job leads. Don't wait until your unemployment benefits end to start looking for work. The sooner you get back into the workforce, the better.