How to Budget for Long-Term Unemployment

Start Early

It’s best to reevaluate your budget as soon as possible rather than waiting until you’ve spent most of your savings. By analyzing your monthly cash flow and savings, you can create a plan to determine what you need to do to stabilize your financial situation.

Distinguish Needs from Wants

All your expenses should be categorized into needs and wants. A basic budget should include what you need to survive. You can save money in this category by visiting thrift stores to buy new or used clothes instead of shopping at big retailers. You can also save on utility bills by unplugging electronic devices when not in use and using a power strip.

Stay Informed About Your Unemployment Papers

If you are receiving unemployment benefits, make sure to stay informed about any forms that need to be submitted. Most states allow you to file weekly claims online or by phone, making the process easier. However, as state offices are very busy at this time, they may not be able to answer phones or respond to emails promptly. This means you should take responsibility for staying informed about any changes that may affect your unemployment compensation.

Look for Side Job Opportunities

For many people, the skills you’ve gained in your main job may be transferable to freelance jobs in the job market. There are hundreds of small companies online hiring freelance services for marketing, content writing, graphic design, social media management, and more. You can build a client portfolio that grows through word-of-mouth in the online entrepreneurial community. Be creative in searching for related job opportunities, such as looking into Facebook groups and chat rooms.

Use Loans as a Last Resort and Use Credit Wisely

If you find yourself getting closer and closer to debt, you might consider taking out a loan to cover some of your expenses. Personal loans typically have better rates compared to consumer loans and credit cards. However, if you’re in a bad financial situation, most banks may see you as a risk for lending money, which may qualify you only for high-interest rates. If you have a mortgage, you might consider easing the burden by lowering interest rates or refinancing. Once your financial situation stabilizes, Woroch recommends paying an extra amount each month to pay off the mortgage faster.

In the end, you can successfully manage your budget during long-term unemployment through early planning, distinguishing between needs and wants, looking for side job opportunities, and using loans and credit wisely. These five steps can be your starting point to maintaining a sustainable budget and increasing your income as well.

Source: https://www.thebalancemoney.com/how-to-budget-for-long-term-unemployment-5092157