How to Budget During Unemployment
Being unemployed is extremely stressful. All of a sudden there may be questions you never considered – how will you pay your bills? Can you afford for your child to go to dance class or stay in the school band? No one wants to be in this position, but unfortunately especially during recessions unemployment will hit some people. But there is one thing you can do! Learn to Budget for during your unemployment.
The unknowns of unemployment
Part of the reason unemployment is so scary is because of a lot of the unknowns such as:
Duration
How long will this last? Are you going to be out of a job for one month? Six months? A year? As you can probably guess, there is a big difference between budgeting for three months of unemployment verses three years of unemployment.
Costs
Realistically, there are always unknown costs that come up in life. Whether it be a small fender-bender or an unplanned baby, things happen. When you’re unemployed these can be even scarier.
Good News – There are things you can do to budget!
While unemployment can be scary – there are things you can do to help make things less scary and to mitigate those unknowns.
1 – Figure out your debt
You might not realize it, but there might be different options for your debt. Depending on the kind, there are programs available to help. If your debt is serious, there are debt management programs. You might’ve heard advertisements for these programs before. They’re also sometimes called debt consolidation programs.
Another option here is to pick up the phone and call your creditors. If you explain the situation and get out in front of it, they’re likely to work with you, either putting a temporary pause on your payments or adjusting your minimum payment. Remember – most of the time – paying something is better than paying nothing!
2 – Cut Back
Ok this is a little bit of an obvious one, but if you’ve got less money coming in, you really should limit the money going out.
Here are some quick places you can cut back your budget during unemployment
Certain things might be easier than others – cutting back on subscription services for example. Do you really need Hulu, Netflix and Amazon Prime? Seasonal clothes shopping might be easier to cut back on for some, especially depending on the climate you live in. Finally, consider staying in and making cocktails with your friends over going out. If your friends and your social life really revolve around bars and parties, consider having a drink before you leave or cut back on alcohol all together – you’d be surprised at how much you can save!
Remember to budget during unemployment, but above all – take care of yourself
Not unemployed but still wondering how to budget during slow times? We’ve written an entire post about how to budget in a recession.
Don’t forget to download our Free! budget template.