What You Need to do to Survive Unemployment

By Larry Lane for InvestorZoo.com

If you find yourself recently unemployed or going through a difficult stretch, you are not alone. You are among the roughly 20-40 million that are unemployed or underemployed. If this is your first time being unemployed, it is probably a very scary time in your life. Now is truly the time to get back to basics and determine what is important in your life.

Most importantly don’t panic, you have a lot of work to do. Here's a list of items you need to address:

1) Depending on your employment contract or your employer’s policy, you may be eligible for a severance package. This may be range between one and three months of your average salary. You may also be eligible to be paid for your unused vacation and/or sick time.

2) If you were laid off for lack of work or fired for just cause, you are most likely eligible for unemployment insurance benefits. You’ll want to contact your local unemployment office and apply for benefits as soon as possible. There is a one week waiting period that you will go without receiving an unemployment check. Depending how hard your state has been economically hit, there may be up to an 8 week waiting period for your first check. Your weekly payment will depend on the earnings of your previous job. You can expect a weekly unemployment check ranging from $235 and $900 depending on which state you reside in.

3) Health care benefits: Upon separation of employment, you will be eligible for COBRA health insurance. Your employer will cover 60% and you will be responsible for 40% of the cost for 8 months. After 8 months, you’re responsible for 100% of your health care costs. While most will see an increase, it’s extremely important to keep your health insurance. Typically, you’ll receive instructions from a 3rd party health care provider. Your employer is obligated to keep your health care benefits active until the end of the month. If you are terminated on the 5th of the month, your employer must pay them until the 1st of the following month. If you do not receive information on COBRA benefits, make sure you contact the HR department of your former employer.

4) Start applying for a new job immediately. Search for new employment on popular job sites such as Monster.com, CareerBuilder.com, Hot Jobs.com, and Cragislist.org. Constantly checking for employment will itself turn into a full time endeavor. One site I’d highly recommend is Indeed.com. If you’re unfamiliar with Indeed, it is an internet job board which consolidates and combines many of the popular sites into one. You can use a variety of search terms of job descriptions as well as distances you’re willing to travel to your new employer. You can post your resume free on each of these sites. You must do a minimum of 3 job searches per week to remain eligible for unemployment.

5) Network: Stay in contact with your former employees. Chances are they may fall into the same boat you’re in. By keeping in touch you’ll also keep abreast of industry changes. Look up networking groups on your favorite search engine. Chances are you’ll be able to find groups which may pique your interest; some even outside your employment interests. Don’t be afraid to ask former customers, business contacts or friends if they know of any employment opportunities that may be available.

6) If you have free time, volunteer. Non-profit organizations are always seeking volunteers. You may find instances where your volunteer position turns into a full time career.

7) Stay active: It’s been proven that physical exercise not only keeps you physically in shape but also helps you stay mentally sharp. Working out will also get you out of the house and distract you from your unemployment situation. Who knows, you could meet your future employer at the gym.

8) Go back to school: If your profession is dying a slow death and is no longer in demand you may be eligible for worker retraining education for a reduced cost or free. Check out your local unemployment office for training assistance.

9) As elementary as this may sound, it’s time to hunker down and eliminate any unnecessary expenses. Your core costs are your mortgage, food, electricity, water, and health care insurance. Everything else is secondary. This would include:

10) Car payment (if you need to sell your car to stay afloat, do it. People have survived by taking public transportation for decades). If you are keeping your car, call your local insurance company to raise your deductible to achieve a better insurance rate. You can also be eligible for additional discounts if you drive under a certain distance.

11)Luxuries such as cable TV, movie subscription, internet, monthly group activities and basically everything else should be cut or eliminated. Comcast has a basic cable plan for $10 if you absolutely need TV.

12) If you have a home phone and a cell phone, eliminate one of them. Visit your wireless carrier store and change to a lower plan. Better yet, visit a few wireless carriers and shop for a new cell phone plan.

13) With the exception of business networking, no more spending $3.00 on coffee. If you have credit cards, pay the minimum payment. If you’re desperate and it comes down to paying for the essentials such as your mortgage or your credit card, the essentials win every time; pay the credit card off later.

14) Start your own business: Why not start your own business while unemployed? There are many stories of the unemployed becoming entrepreneurial superstars. There are thousands of people making a living from selling on EBay. If you have many business contacts with previous customers, sit down and have lunch or coffee (coffee is much cheaper) and try to find a niche that isn’t currently being filled. Your local unemployment office may offer classes to help those who are interested in self employment. If you like to blog, you can write about your favorite subject or start your own web site. Popular free blog sites include www.wordpress.com or www.blogspot.com. If you write consistently and articles people find interesting, you may walk into a paid position writing for an established website. Check your favorite search engine and type in the search term “pay for blogging” or “freelance writers”. Everyone has at least one interest and one thing that they’re good at. If you can find an audience for your passion, chances are you can bring in a paycheck from it.

15) If you have unwanted items, clean up your house and sell your extras on Ebay. One man’s junk is another man’s treasure. If you have collectibles, they may have to be sold. Unfortunately, those old postcards, coin collection and baseball cards aren’t editable.
Every penny you save should go into your checking account and viewed as emergency money. Until you’re employed, only spend money on the essentials of life. Save just $200 per month and you may have another month or more of expenses saved to get you through another month should your unemployment benefits run out.

If you are having difficulties paying for food, contact your local DSHS (Division of Social and Health Services) and inquire about food stamps. The food stamp program has been updated and actual “stamps” aren’t handed out any longer. If you’re eligible, you’ll receive a debit card with an account balance, thus eliminating any potential embarrassment when you go food shopping. You’ll find just about every major grocery store accepts the card. If you are truly in need, don’t feel guilty; your tax dollars are funding these programs. If you’re eligible, take advantage of this program. Other sources of free or low cost food include food banks run by local churches and charities such as your local Hopelink chapter (www.hopelink.org). If you have fallen 2 months behind on your utilities and are facing a shutoff, Hopelink may be able to pay part or the full balance of your utility bill for several months.

Although you are not working right now, it will help a lot to keep telling yourself that being unemployed is a temporary situation. You will have to stay active. You will have to put in hours on the internet searching for opportunities, attending job events, filling out unemployment job search forms and networking. Do not spend one day being complacent. Your job at least 5 days a week is to be employed again. With luck and perseverance, you can survive unemployment.

Larry Lane is the editor for InvestorZoo.com, a social networking site specializing in personal finance. Questions and comments can be sent to Larry.Lane@InvestorZoo.com