A little back story about being unemployed
Prior to 2007, my husband and I worked in Silicon Valley. Neither of us ever had any difficulty finding a job. In fact, most of the jobs we found were because someone recruited us or because we knew someone who knew someone.
That all changed at the end of 2007 when my husband and I, like many of our close friends and co-workers, suddenly found ourselves unemployed all thanks to the great recession where roughly 8.8 million jobs in the US disappeared between 2007 and 2010.
We didn’t panic at first because we didn’t even know we were in a recession. We just assumed we would find new jobs anytime we wanted-just like the other times we were laid off. (Layoffs used to happen a lot in Silicon valley- maybe they still do?).
We also had money saved, generous severance package and of course unemployment benefits. We felt like we were in a good place, so we decided to take a few months off before looking for work. I had just had a baby, so the timing seemed perfect.
After a few months, we started looking for work, but surprisingly we weren’t getting any callbacks. After a few more months of no callbacks, we began to worry.
After about a year, it was becoming more and more clear that we were in a recession.
I remember watching some random news channel on T.V. which said that a single job posted at Home depot drew over 1,000 applicants? I’m not sure if that was an exaggeration, but it did make sense at the time. There were fewer jobs around so people were taking whatever jobs they could to tie them over until they could get a better paying job in their field.
We knew quite a few people hit hard by the recession.
- An ex-co-worker who was the director of engineering ended up getting a part-time job at UPS.
- An ex-neighbour who was a VP at a video gaming company let his house go into default and ended up moving to Oregon where the cost of living was cheaper.
- I could go on, but you get the point.
At this point, we weren’t sure about our future. We saw the writing on the wall and decided to pull out all the stops to make sure we could ride this recession out. We cut corners, cut costs and worried a lot.
Then we found jobs only to be laid off again so back we went again into survival mode and tightened our belts.
Obviously, we survived, but the ordeal of losing our jobs and running out of unemployment benefits was a sobering experience and an important reminder that it’s important to hope for the best but even more important to prepare for the worst.
The one wonderful thing that did happen is that being unemployed is part of the reason that led us on our path to eventually move to France. You can read about how we ended up moving to France with our three children here.
DID YOU KNOW: in the U.S., Canada and certain parts of the world, if you are unemployed, run out of unemployment and stop looking for work or if you are laid off and take a job where you are underemployed just to make ends meet, the government doesn’t count you in the official core statistics of the“Unemployment rate”. The government calls these people “discouraged workers” or “the hidden unemployed.”
Here are 11 things you can do to survive long term unemployment
Of course, you should remain optimistic, but you should also be prepared for all possibilities because you never know. The more you prepare for a worst-case scenario, the less likely you’ll be backed into a corner forced to make impossible choices. Here are just 11 things you might consider taking action on should you ever get laid off from work.
1.) File for unemployment benefits immediately.
Apply for benefits as soon as you are unemployed. Claims usually start a few weeks after you complete your application so the longer you delay, the longer you’ll have to wait for your unemployment benefits to kick in.
2.) Swallow your pride and research government benefits and assistance programs (just in case)
In addition to unemployment insurance, your temporary reduced circumstances may entitle you to certain government assistance programs. Remember you paid for them out of every paycheck so you might as well take advantage of them if you qualify.
Below are some possible benefits your government may provide for qualified persons.
- Family benefits.
- Public Pensions.
- Education and training.
- Housing benefits.
- Disability benefits.
- Food benefits: known as SNAP Food Benefits in us formerly food stamps
- Welfare or Temporary Assistance for Needy Families (TANF)
- Medicaid and the Children’s Health Insurance Program (CHIP)
3.) Figure out your finances
Unless you’re filthy stinking rich, it’s crucial that you create a temporary budget, but before you do, you need to figure out your finances: all your expenses, your exact monthly expenditures etc. If you already keep track of this great but if you don’t, it’s time to figure out just where all your money is going down to the penny if possible.
You don’t have to do anything fancy, but I recommend using a spreadsheet with categories for each type of expense and columns for months. There are templates you can download for free, so you don’t have to reinvent the wheel.
Here is a link to some free budget templates.
4.) Create a temporary budget: Prioritize bills and figure out where you can cut back on expenses.
Once you have your finances figured out and you know pretty much all your expenditures, you can start evaluating your expenses. The goal is to prioritize your bills and figure out where you can cut back. You might be surprised what you’ll discover.
I discovered that our food bill was our biggest expense, so I made a conscious effort not cut back on food but to cut my food bill. I stopped buying name brands, no more expensive cuts of meat and no soft drinks. We also did not go out to dinner unless it was a special occasion- a birthday, an anniversary etc.
We ended up saving several hundred dollars a month and still ate well. We made other cost-cutting measures, but you get the point.
Here are examples of areas where you could cut costs.
- Car maintenance: Put off car maintenance or expenditures
- Dining out: Stop dining out and cook more at home.
- Groceries: Only buy things on sale or essential items. You don’t need to buy filet mignon.
- Stop spending on all non-essentials: such as new clothes, shoes and accessories, anything that could be considered impulse buys.
- Housing: Depending on your financial situation, you’ll need to figure out if you should move in with friends or a cheaper place.
- Cable: Cable is expensive. Nowadays you can watch everything you want via the internet. Netflix is a good example. It’s cheaper than cable TV.
- Phone lines: Can you cut back the services on your phone? Do you need that landline?
- Car insurance: Can you get cheaper car insurance or reduce your monthly premiums?
- Gym membership:
We had a lot of fat in our budget, so I think we ended up cutting close to a thousand dollars in expenses per month.
TIP: Keeping track of liquid cash is hard. Use your debit card for all your expenses so you can keep track of all your expenses going forward. You can then download your bank transaction every month and input your expenditures into your budget spreadsheet. I use a combination of Quicken and excel, but you can use any system you want as long as you have a system to track everything.
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5.) Sell Stuff You Don’t Need and get some Extra Cash
We all accumulate crap over the years. Some of it is junk, but some of it might be worth money to someone else. Get rid of what you don’t need. Not only will you be getting rid of unneeded things, but you’ll also make some extra cash.
We went through all our stuff and sold a few thousand dollars worth of things that were just lying around. Look for things that are hidden in your closet that you don’t use very much. I found a camera lens and a video camera among other things.
My husband sold things in groups. He had a bunch of potted plants that were not worth a lot if sold individually, but together he got over $400. Take your books to a local used bookstore and while you are at it, get rid of unused clothes and donate them to goodwill. Make sure to keep the receipt for a tax write off. I’ve sold things on both craigslist and eBay.
If you have two cars, you could sell one, or if you have an expensive car, you could sell it and get a cheaper one.
6.) Expand, build and strengthen your skills.
Employers and career building experts recommended expanding and strengthening your skills during a period of unemployment which will not only make you more marketable; it eliminates that dreaded gap in your resume / CV.
There are a variety of things you can do such as volunteering, taking temporary work, or signing up for a class that develops your professional tool kit. Whatever you choose to do to expand and strengthen your skills, you’ll show future employers that you’ve made the most of your time.
7.) Update your CV / Resume ( and look for work)
Not all companise advertise their jobs.
One way to find your dream job is to go to the websites of companies where you’d like to work. Then look for a ‘Careers’ or ‘Jobs’ link. You could send the hiring manager or human resources your résumé with a note explaining that you’d like to work for them and to keep you in mind when a job opening becomes available.
8.) Reach Out To Your Network
It can feel awkward, but it’s important to reach out to your network of friends, family and ex-co-workers and let them know you are looking for work, but it’s worth reaching out to them because you never know where it might lead.
9.) Keep Looking for new sources of income – look outside the box if you have to.
Rent a room or basement out: Renting a room for an extra $200 to 400 dollars per month might be the extra cash you need to get you by for a few more months. We never did this because our house wasn’t big enough, but if you have the room why not?
Start a home business: If you’ve ever wanted to start a home business, now might be the time.
Find a freelancing job: Connectivity is the new currency. A consulting or freelancing gig in your area of expertise is a foot in the door and could lead to a full-time job. Not to mention an excellent way to earn some side money until you find a full-time job.
These days there are lots of places to find freelancing work, and it doesn’t even have to be in your professional domain. On sites like Upwork.com, you’ll find all kinds of jobs that range from data entry and copy-writing to web design and programming. It’s the eBay of freelancing. Also, look on Craigslist in their job section. Sometimes they have one off jobs like contract sewing. I once saw a guy who put an ad on Craigslist for his services. He rented himself as a part-time “husband. He did repair work for ladies who couldn’t’ fix little odds and end in their home.
- Upwork formerly the already successful freelance website Elance-oDesk, this website is straightforward and to the point but adds useful features such as chat, earnings tracking and the ability to deny jobs. Jobs are posted by clients and freelancers make offers on said projects.
- Freelancer is arguably Upwork’s main competitor with over 9 million postings. The main distinction is that it has more tech orientated jobs, compared to the more marketing orientated offerings on Upwork.
- Flexjobs although essentially a job search website, it has a plethora of freelance jobs, which are also screened to discourage scam job postings. The term “freelance” returns an admirable 3,121 jobs.
- Odd Job Nation this website is entirely dedicated to its namesake: odd jobs. Not only finding them but also how to be completely self-employed. The reason the founder Jeremy Redleaf created the website was because many of his friends in very traditional jobs had never worked freelance.
10. Line Up Credit
You never know when you need a line of credit or short term loan to get you over the hump. A good idea is to set up a line of credit sooner rather than later in case you need it down the line.
You could rely on credit cards, but that’s dangerous because credit cards have one of the highest interest rates of any short term loans, including fees for late payments and other hidden costs. Usually, when you only pay the minimum payment, it goes entirely to interest, doing nothing to pay down the amount of debt you have accrued. This should be your “Hail Mary”.
If you own your home and you have a decent amount of equity and some form of income- unemployment, alimony, etc., you could take out a home equity line of credit ( HELOC) which resembles having a credit card with a revolving balance.
If you’re closer to retirement age, you might consider taking out a reverse mortgage. One advantage of a reverse mortgage over a traditional home loan is that you will receive money against your home’s equity and not have to pay that money back monthly as you would with a conventional loan. However, a disadvantage is that your loan balance will be due in full if you ever decide to live elsewhere. Similarly, your heirs will have to pay the loan balance or allow the home to be sold in the event of your passing.
11-Have an exit strategy
Having an exit strategy or fail-safe plan in case of a worst-case scenario is a must. What that looks like is going to depend on your financial situation, your family situation, and you.
We created our exit strategy based on a few variables such as money, family and location. Based on the amount of money we had in our savings account, we decided that if we didn’t find good paying jobs by a specific date that we would have to move.
When that date approached, we started making plans to leave our lives in California behind. We moved to the East coast with my family in Montreal for a while then with Blake’s family in Maryland until finally, we decided to try something different and move to France for a year to which never would have happened had we not lost our jobs and left our old lives behind.
The world is full of opportunities, and great things often come out of the most unfortunate circumstances. Remember that your situation is temporary. Stay positive and take action every day toward your goals. Whether you end up launching the next great tech company or you find your dream job next week, there is light at the end of the unemployment tunnel.