How to Survive Unemployment
By Angela Colley | Money Talks News – Mon, Oct 8, 2012 10:46 AM EDT
According to the U.S. Department of Labor’s Mass Layoffs Summary, 1,032,764 people have been laid off so far this year – and that’s just the reported numbers.
If you’re one of the recently unemployed, I feel for you. I’ve been there.
It’s a scary thought to realize you just cashed your last paycheck and don’t know where the next will be coming from. But you’ll survive. I once went unemployed for six months, and did so without spending my weekends at home alone or eating ramen for dinner. I lived well and you can too. Watch the following video, then follow the steps below…
1. Apply for unemployment benefits
You can claim unemployment benefits if you lost your job through no fault of your own. The U.S. Department of Labor says it takes two to three weeks to start receiving benefits after you file a claim, so start the process the instant your job ends. Some states allow you to apply over the phone or online, while others require an in-person visit. To find out what your state offers, check out the DOL’s list of state unemployment offices.
How much you’ll receive is determined by formulas that vary by state, but typically is based on what you earned over the previous 52 weeks. For example, one common formula pays half of what you used to earn, with a cap that’s tied to your state’s average earnings.
In most states, you can receive benefits for up to 26 weeks, but there are programs that can extend it.
For example, a federal program called Emergency Unemployment Compensation (EUC) offers additional benefits, but ends on Dec. 29, 2012.
There’s also a combined state/federal program called Extended Benefits that provides 13 to 20 weeks of additional benefits to those exhausting state compensation. But this program is only available in states where the unemployment rate is above an established threshold. Your state employment office can tell you if your state qualifies.
And don’t get caught off-guard regarding income taxes: Unemployment compensation is taxable.
2. Go on an unemployed budget
Before the Great Recession, financial experts recommended saving three to six months of expenses as an emergency fund, naturally assuming you’d find a new job in that time. And while you might, times have changed. In August, the U.S. Department of Labor said people who have been unemployed long-term made up 40 percent of the total unemployment rate. Given those statistics, you might have to stretch your emergency fund out longer than you wanted to, so put your money on a survivor’s diet now. Here’s how to pull it off:
- Tally up your savings and unemployment benefits and then divide the total into several months of “income.” This is how much you can spend in a month and survive. (How many months you’ll need is impossible to tell, but play it safe and aim for close to a year or more.)
- Update your budget and look for savings. For example, when I was first laid off, I went through my bills and realized I could downgrade my cell phone and Internet packages, saving myself $45 a month.
- Take a hard look at your spending and see what you can cut without losing your quality of life. For example, you don’t really need cable if you have Netflix. In You Don’t Have to Pay for Cable TV, we figured out that the average cable subscription costs $900 a year. Netflix costs about $120 a year. Switch and save $780 year.
- Be smarter, don’t pinch pennies. You probably can’t spend as much as you used to, but you don’t have to make yourself miserable watching every penny while you’re unemployed. Just use a few easy money-saving techniques, like buying things when they’re on sale, using coupons, or buying generic. We’ve got loads of helpful advice on this site, like: 30 Tips to Save on Food, 7 Things You Should Always Buy Generic, and 205 Ways to Save Money.
http://finance.yahoo.com/news/survive-unemployment-095001997.html
Proverbs 24:16 — For though the righteous fall seven times, they rise again.
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