Unemployment is on everyones mind, with millions suddenly out of a job in the fallout of the global coronavirus pandemic. If you are among those who are having to cope with an abrupt loss of income, you know its time for tough choices. Some guidance may be helpful in deciding what to do firstand what not to do if you can help it.A useful concept is to think about putting yourself on a financial diet. Just as you would follow a specific plan while trying to lose weight, having a plan to manage both expenses and income will help you maintain the necessary discipline to get through tough times and get back on the job.Even in normal times, you might easily spend several months between jobs. Now, with so many industries shut down or forced to cut back, it may not be realistic to expect to find a new job soon. That financial diet should assume youll be out of work at least six months. If you get lucky, you wont need the plan anymore. But its always wise, while hoping for the best, to plan for the worst.Before getting into the particulars, it should go without saying: a plan is only as good as how well you follow it. If you cheat on a diet, you wont lose weight. If you cheat on your financial diet, you may find yourself in a bind. Thats not to say the plan cant be adjusted as circumstances change. But hard times call for discipline.One vital aspect of an unemployment diet is a systematic search for work. But under current circumstances, thats likely to be far more challenging than the other side of the ledger, controlling your expenses. So lets address that first.A first step is to face the reality that your lifestyle likely will have to change. (Not that it hasnt already, what with quarantines, social distancing and the shutdowns of sports, entertainment and dining out.) Take an honest look on how youre accustomed to spend your money. Distinguish the true essentialsfood, utilities, mortgage or rent, insurance premiumsfrom the optional luxuries or even nice to have categories.You may be able to trim down enough in the fat category that you dont have to cut muscle or bone. Examples: simpler grocery lists, household energy saving, cutting out some memberships or subscriptions. Lots of people are planting gardens or tending backyard chickens to help stretch food dollars. Much of this, of course, is made easier by the realities of Covid-19. If you cant go to the movies or a nightclub, you dont have to worry about spending money for tickets or drinks. Time on your hands makes economical do-it-yourself alternatives feasible. Skipping a vacation is easier when cruise lines and resorts are shut down.But what if eliminating optional spending isnt enough? Some hard choices may appear easier as time goes by. Maybe selling that nice new car will free you from a monthly obligation and give you some ready cash for other needs.
On the other hand, consider whether a short-term quick fix might actually cost you more in the long run. Ive heard the example of a man who sold his lawn mower at a yard sale for $75. When he got a job a few months later, his property was a mess and he had to pay $350 for a new mower. Maybe he should have held on to the old machine and used it to do some neighbors lawns, earning that same $75.That gets us to some possibilities for bringing in new income.First, of course, is unemployment compensation. While the details vary from state to state (and North Carolina offers some of the nations worst jobless benefits) its still an essential safety net. On top of whats available in normal times, you may have qualified for extra emergency help under recent federal legislation.Hard as things are now, you might still find opportunities for new work. For example, North Carolina is hiring contact tracers to help control the pandemic. Grocery stores and some other retailers have been hiring. Even if they arent in your preferred career path, unexpected job opportunities may present themselves. And dont overlook possible side hustles, too. And not just mowing lawns. A good number of home-bound hobbyists have been putting their sewing machines to work, crafting face masks and selling them online and to friends and neighbors. You may have similar opportunities to put a skill or interest to work and fill a useful niche.Back to the lawn mower example: while it may be counterproductive to get rid of something you actually need, most of us have houses and garages full of stuff that we can easily do without. So dont be afraid to put in the time to organize and conduct a yard sale, or advertise surplus items through local media like Craigslist.You may have to consider drawing from, or borrowing against, your retirement plan. Thats something to do only with great caution, because of the risks to your future security. But if you must, youll catch a break from recent legislation that relaxed the federal governments rules. I discussed that in detail in my May 2020 article: Click here to read the article.Because unemployment is so widespread in the current emergency, many other institutions are relaxing their rules, too, helping out their customers. By all means, ask your creditors for help. Some are granting payment holidays. Others are waiving late fees, penalties and even interest for people who are struggling. Utilities may be willing to stretch out payments, and many have been barred from cutting off electricity or water for non-payment.Now back to the search for a new job. For many people, of course, their first recourse will be to go back to their old job, whenever their employers are ready to start opening up or expanding again. So naturally you should stay in touch and stay in your former bosses good graces.The conventional wisdom for normal times is that searching for a job is itself a full-time job. With so many more competitors vying for so few remaining openings, the conventional wisdom may not be very helpful for now. But its never a bad idea to remember some of these time-tested tactics:
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Unemployed? Put Yourself On A Well-Planned Financial 'Diet' by Alyce Phillips | Sponsored Insights - Greater Wilmington Business Journal
