5 Tips on Financial Survival for the Unemployed

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5 Tips on Financial Survival for the Unemployed

If you were marooned on a desert island, not knowing if or when you would be rescued, what’s the first thing you would do? A lot of people would say look for food (because that’s how we think), but the reality is, water is more important. We tend to overlook something that simple because it’s always there for us: we seldom think about it, we just use it to our heart’s content on an everyday basis.

But in this situation, you don’t know if or how much water is available. Maybe you had a canteen of fresh water with you when you washed ashore (it’s a stretch, I know; work with me here). Your first impulse is probably going to be to act like normal: you’re thirsty, water is here, so you drink your fill.

But just as the canteen gets to your mouth, you realize this might have to last you a while. So you conserve. And you start seriously–maybe even frantically–thinking about finding a water source. Now let’s change the scenario. Instead of water, say it’s money. And the desert island is the situation you find yourself in after being let go from your regular job. See where I’m going with this? When you’re laid off or fired, suddenly money is an unknown. You’ll need to make adjustments so as to conserve as much as possible. You also need to start looking for more–as in, finding a new job. It’s not a fun position to be in, but it’s also not the end of the world. Here are a few tips we’ve compiled to help you organize your thoughts.

  1. Think beyond today. Maybe you’ll find a new job immediately. Or maybe you’ll be out of work for months. The reality is probably somewhere in between, but it’s better to plan on being unemployed for six months or longer. Even if your skills are in demand, just the process of switching positions takes time. Plan your conservation and job-hunting schemes based on that. 
  1. Adjust your lifestyle. If no money is coming in, you may need to prioritize your spending: Ongoing bills like mortgage or rent, car payments, and the like need to precedence over, say, eating out all the time. Utilities are ongoing, as well, but you may be able to conserve some in that area: make sure lights are out when not needed, cut your thermostat back a degree or two, maybe even decrease your internet or cable services. 
  1. Look for new sources of income. It goes without saying that you’ll be searching for a new job. At the same time, keep your eyes open for other ways to bring in money. For example: have some items you’ve been meaning to put on eBay “as soon as you get time”? Well, you have time: get to it.  There are other temporary revenue streams to pursue, as well. Probably the first place you should look is your state’s employment office. Unemployment benefits require you to meet certain criteria for eligibility, but if you do qualify, it’s a reliable resource.


Depending on what type of work you do, there may be a chance to pick up some freelance projects. If you’re out of work for an extended period, you might even consider a temporary position: it may not be your dream job, but some income is better than none. And who knows? A temp job might even lead to full-time employment. Either way, it beats staying in bed and watching “Law & Order” reruns all day.


  1. Use the money you have …. conservatively. Financial advisor Clark Howard suggests that everyone should have an emergency fund set up that’s equal to three to six months of living expenses. Most people don’t … but if you do, this is just the sort of rainy day you were saving for. Conservation is still important, though: you’ll be surprised at how fast a savings account can be depleted when it’s used as a source of funds for everyday expenses.

A good number of people resort to credit cards when unemployed. It might be inevitable, but avoid it if you can. You’re not paying expenses at that point, you’re only postponing the payment for a while … and credit card interest is a high price to pay for the privilege. And whatever you do, don’t rely on debit cards: most credit cards offer full liability coverage if stolen–debit cards don’t. If your debit card is stolen, a thief can wipe out your bank account with one call to Amazon. You might eventually get the money back … but it will take time that you don’t have.

  1. Believe you will be rescued. As desperate as all this sound, keep in mind that it is a temporary: Eventually a new opportunity will discover you on your little island and the crisis will pass. Try to weigh carefully each step of your conservation plans: do what you need to survive, but only do what you really have to.

There’s no way around it: losing your job is stressful. With a little planning and some strategic budgeting, you’ll be more likely to stay afloat financially until you your ship comes in.