Unemployment continues to a major issue right now, with 31 million people collecting some sort of unemployment benefits [source]. When people’s incomes are interrupted, they often turn to us for help with their debts. It’s a good move to address your debts if you find yourself unemployed, but there are other targeted steps to take to make the most of your situation.
Start with Your Local Unemployment Office
We offer a list of Unemployment Office Locations on our web site that collects the links for all 50 states’ unemployment offices.
Start here to find the link for your state. It’s important to go straight to the source for the latest information, as plans and programs are changing frequently. Anything you read online could be outdated or inaccurate, unless you’re getting it directly from one of the state unemployment offices or departments of labor we link to above.
It is useful to follow the news and be aware of what changes are being proposed by Congress or the White House, but until new benefit programs are actually enacted, don’t assume anything.
A good source for the latest info that can be trusted is USA.gov’s Unemployment Help site: https://www.usa.gov/unemployment.
Consider Other Kinds of Benefits
There are other kinds of unemployment benefits other than a check. Besides the payments from unemployment insurance, you can get workforce training an education to help you qualify for a different kind of job. Start with CareerOneStop from the US Department of Labor for more information.
Some states also offer Self-Employment Assistance. Check this for more info from the U.S. Department of Labor.
Besides unemployment and/or self-employment help, you might qualify for TANF (Temporary Assistance for Needy Families) programs. Visit the Office of Family Assistance for a link to your local TANF office.
Don’t use credit as a substitute for income. If you don’t have enough money to get by, consider every other option first, but do not start borrowing to pay your bills. That will take financial difficulty and turn it into a crisis.
By running up debt, you’re just delaying a reckoning, and making it much worse. Better to face your situation now, make the tough choices you need to make, and get what help you need as soon as you can, rather than waiting until your debt has gotten further out of control.
Create a New Budget
If your income has been reduced and you’ve cut up your credit cards, you’re going to need to make some serious budget adjustments to get by during a financial emergency.
For one thing, don’t be afraid to cut back severely. Over the years we’ve seen many people who got deep into debt because they turned to credit cards to keep up their lifestyle. Today’s situation is unique in our lifetimes; no one will judge you if they see you cutting back financially. Everyone is in the same situation together right now, so there is no need to borrow money to appear like everything is going great for you.
Take some free online courses to get up to speed on budgeting, and start the tracking process right away. Before you can construct a meaningful budget, you have to know where your money has been going. Do this work in writing; construct a portrait of a month’s worth of spending and use that to propose your new monthly budget.
Remember, at its most basic level, a budget is a plan. Make sure any spending you do is planned in advance, in writing. If your budget doesn’t work the first month, revise it using what you’ve learned. If you manage to come in under budget, save the extra in an emergency fund. The current situation has taught us all how critical it is to have an emergency fund in place for future hardships.
Prioritize Your Bills
Sometimes, when going through a situation like unemployment, you might fall short. How do you decide which bills to pay first?
Prioritizing your bills when money is tight is not always easy. Housing costs – like mortgage or rent, utility bills, and other housing expenses should be your top priority. At the bottom of the list are debts in collection.
Stay Healthy – Mentally and Physically
You may find that not having to go into work every day makes you less healthy. You might be less physically active and prone to unhealthy snacking if you are home with your kitchen all day. It’s important to take positive steps to enhance your health during this time.
Similarly, psychologists have studied the mental health effects of unemployment, and some steps they recommend to stay mentally healthy can be important for the unemployed.
For one, create a routine. Losing the time structure of a workday creates a disruption that is bad for you physically and mentally. Come up with a new routine to stick to, and include some exercise or physical activity in that routine.
It’s also important for your mental health to not be hard on yourself. You have to accept your new reality in order to face it, but remember that being unemployed is normal, especially right now. It’s also difficult for anyone to cope with, so don’t let natural feelings of anxiety diminish your feelings of self-worth.
Don’t spend too much time looking back—your job now is to create a plan for moving forward, one day at a time. Researching unemployment benefits and workforce education programs is a great place to start. Creating a budget is an excellent step to keep you focused on what’s next and help you survive the situation financially.
Don’t Go Through It Alone
It’s tough to face this kind of situation by yourself. See what kinds of groups you can join and develop relationships while you have time away from work. Network with people in your career field so you will be aware when job opportunities pop up, and try to learn what skills employers are looking for in an applicant like yourself.
You should also try to be a resource to others in your situation. Share what you’ve learned about your benefits situation and the budgeting process. Volunteer for local charities and try to be of help to as many people as you can.
Knowing more people makes you happier and healthier, and will help you develop connections and job skills to get back to work sooner. Don’t isolate yourself during this time; do just the opposite and make connections, even if they’re only online.
Another potential partner for you during a tough time like this is free counseling from nonprofit organizations. We offer credit and debt coaching for those who need it, and free educational resources through our website. A good place to start might be our free “Surviving a Job Loss or Reduced Income” workbook, available from our Downloads page.