Budgeting While Unemployed

Unemployment means thinking before you spend.

Unemployment means thinking before you spend.

You already know that when you lose your job, the first thing you must do is get in the unemployment line. The second thing you must do is start sending out resumes. But you might not find a new job immediately, and your unemployment checks may not be enough to make ends meet in the meantime. It may not be pleasant, but you can survive if you take steps to stretch every dollar.

Move your bank card or cash to a place where you haven't habitually kept them. This can be as simple as switching them from one pocket to another. When you're about to pay for something and you reach for something that's not there, it will give you a moment's pause to consider whether you really need whatever you were about to purchase.

Take control of necessary expenditures like food and gas, and similar items that you can pare down with a little effort. Stop buying extras at the grocery store just because they're on sale and you might need them someday. Make it a point to turn off lights and electronics when you're not using them. Stop driving unnecessarily -- don't go anywhere out of your way unless it's absolutely necessary.

Renegotiate your cell phone plan to one with fewer perks at a lower monthly rate. If your carrier imposes a financial penalty for doing so, figure out if continuing to pay a higher monthly rate over the next six months will actually amount to more than the penalty.

Review credit card statements and bank statements from the last month you worked. Identify entries for expenditures that only an employed person can afford, such as meals out, cable television, or your gym membership. Cut them from your budget.

Prioritize the bills you must pay. You'll need your car to look for work, so you'll want to keep that loan current to avoid repossession. You'll have to pay your rent or mortgage, and you'll need electricity and -- depending where you live and the season -- you may need heat or air conditioning. Pay everything else last, if there's any money left over. This includes credit cards and even student loans. Try to make minimum payments on these accounts so your life isn't a financial shambles when you find work again, but if you can't do that, you can't.

Accept any job you can get, at least for the time being, even if it's well beneath your skills and ability. It will extend the life of your unemployment benefits and give you more time to find a position comparable to the one you lost. Budgeting is twofold. It doesn't just mean cutting expenses. It also involves keeping a steady flow of money coming in.

Sell assets you can live without, such as the stamp collection you haven't looked at in ages, stocks or bonds, or maybe the boat you only use in the summer. You can draw off the proceeds incrementally, a little each month, to make up the difference between your unemployment checks and your must-pay bills.


  • Avoid the temptation to use your credit cards. Yes, they can defer payment for necessary expenses such as gas and groceries for another month. But if you're not employed next month, you may not be able to make the payments, and the minimum monthly payment will have increased if you charge a lot. Use credit cards only in an emergency.

About the Author

Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.

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