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How to Get Out of Unemployment (3 Survival Tips)

Updated

Losing your job isn’t something that anyone wants to wake up and find has happened to them, but unfortunately, it happens more often than not these days. It can be devastating to realize that your career, job and everything in your world has just exploded and that your family is now relying on the money you have in the bank, the food you have in the cupboard or worse…the lack thereof. It doesn’t have to be so because while you can’t prevent your company downsizing, going out of business or an accident on the job that results in unemployment, you can prepare for it without too much extra work. 

Our little family of five was once faced with this. We were lucky to have a two weeks notice before my husband was laid off from his job, however, we were a single income family and the option of relying on a second income wasn’t there.

We went from living on $1,000 a week to only $450 a week  (the unemployment maximum at the time) for 3 months. Thankfully, we prepared (kind of) for a situation like this. I guess you could say that I’m a little paranoid about major life events, especially when it comes to losing a job. I like to have things available just.in.case something like unemployment happens.

How to Get Out of Unemployment

Here are the 3 steps on how we prepared for my husbands lay off– which helped us live on $450 a week with a family of five.

Build an Emergency Fund Having money set aside for you when unexpected things like unemployment happen in life is the single most important budget tip that I could ever give you. Ideally, you want to have 3-6 months’ expenses saved while still having the job. $1,000 is a great starting point for most families. To build your fund without too much pain, trim back any unnecessary expenses in your budget and put any excess cash into a savings account. Before being unemployment, you can sell items that your family no longer needs or wants is also a great way to find extra cash that you didn’t know that you ever had. Sites like eBay, Craigslist and Facebook buy/sell/trade groups are fantastic for selling those things for free or at a low cost. 

Build a Stockpile – Food is one of the single most expensive costs that a family can have and if you’ve lost your job, you’ll find added stress and worry if you don’t know where your next meal is coming from. Building a stockpile before you face unemployment is a great way to cut those worries off at the pass. For most families, a 6 month supply of things that you use on a regular basis is sufficient but if you’re more comfortable with a year’s supply, go for it! You and only you know what your family’s comfort levels will be so working within that. Each week when you shop, add a few extra items and before too long you’ll have a buffer to fall back on.

When building your stockpile, be sure to include things like toilet paper, shampoo, diapers, and all of the household items and personal care items your family uses. This just takes that buffer one step further and ensures that your family will have everything that they need during a rough time.

Pay extra on your monthly bills – Did you know that you can actually pay more than you owe on your regular utilities? You sure can. Some people don’t actually realize that little fact so I wanted to be certain that you did before I continued on. Building up a credit on your bills is a fantastic way to prepare for a job loss. If you have that credit built up and something happens, you’ll likely have the option of skipping a month or two’s payments if you need it because the funds for that payment are already sitting in your account. A very simple way to build that up is to just pay a set amount each month no matter what your bill is. If your bill is $75.00, but you pay $100.00 each month, you will be banking a $25.00 credit each and every month and eventually you’ll have enough built up to cover the entire bill for whatever time period you’ve paid for. Therefore, you’ll be able to have few months to adjust in case you lose your job.

A bit of caution with this step though: Once you’ve got a credit built up, don’t make the mistake of laying off of that payment unless you have to. This isn’t a reason to just decide you don’t want to pay your electric one month because you have a month of credit. Keep that credit there solely for when you truly cannot afford to pay that bill.

Losing your job doesn’t have to be the thread that broke the camel’s back for your family. Use the steps above to prepare in case it happens to you and you’ll buy yourself and your family a few months of stress-free comfort just in case.

What are the steps that helped you to get out of an unemployment situation like ours?

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  • EES says:

    You would be better off putting the money in the bank rather than paying more on your utilities unless you don’t have the self discipline to not spend it. If your income is low enough, you probably qualify for some utility subsidies.

    If you can’t not spend your savings you might be better off buying some gasoline, grocery store, and Target gift cards so you have those on hand for an emergency.

  • Laura G says:

    Thank you for the good information 🙂

  • Fina says:

    Thanks Josie! This really helps!

    My husband got laid off a month ago and I’m really trying to kick up my couponing and stockpiling all the necessities.

    Thank you for your blog and all you do.

  • marlene says:

    weve gone through this before paying a little more on your bills really helps and stockpile too thx josie

  • j k says:

    This is a great reminder…it can happen to us at any time. When I was expecting my first child, my husband got laid off and was unemployed for 9 months. We lived on unemployment and disability insurance for a while and then I went to work part time after the baby till he finally got settled in on his new job. Now, we definitely have an emergency fund to last us at least 6 months just in case.

  • kimmiw says:

    TY Josie and TY yet again.
    In the last 3 years I have been financially and emotionally challenged. 2012, Breast Cancer diagnoses and out of work for a year and recently laid off March 2015. Thank you for coming into my life and laying it all out. Allowing me to have a stockpile we can live off of and SURVIVE! Couponing has changed in the last few years, but the savings are there to be had and you lead us right to em.
    Thank you for Challenges in saving money. I was doing the 52 week backwards and then saved too much and just paid for us to just go to Dominican Republic. Its the holidays all year round with us.
    You have been a blessing to my life

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