Expenses to cut when you are unemployed
No matter how you lose your job, whether your plant closed, your business relocated to another country, or you were laid off, forced to resign or if you were fired directly, being unemployed is a nerve-racking place to be. Hopefully you have an emergency fund in place that can support your budget for at least a few months. It is interesting how the conventional wisdom on emergency funds has changed just in the past few years. In 2005-’06-’07, personal finance advisors often recommended a three month emergency fund. Then it was six months and now, it is prudent to look at having nine or ten month’s budget saved up for the event of job loss. People are taking longer and longer to find work.
Even if you are fortunate enough to have a healthy emergency fund on hand, an unemployed person needs to reduce expenses as much as possible in order to keep the ship right-side up. Here are some suggestions of where you can cut or shave your budget to reduce spending and make that emergency fund last as long as possible:
This is a no-brainer. Many of us have the habit of considering cable or satellite television to be a necessary utility. As a sports fan, news junkie and documentary consumer, I sympathize. But if you are unemployed and still subscribing to cable or satellite . . . you have a problem.
To be honest, I would not cancel internet service if I lost my job. I think it is essential to modern day job hunting and the internet can help you shop for the best deals on the few purchases that you might need to make even while unemployed. At our house, broadband internet more than pays for itself. There are some things that one might do to reduce the cost of internet – request permission to piggy-back on your neighbor’s wifi or use the wireless internet at a restaurant or coffee shop down the street.
This is another expense that would be difficult to completely eliminate. I think most of us would sooner get rid of our home phone than our mobile phones. You might want to consider reducing the number of lines in your plan or inviting a friend or family member to join your family plan in order to share and reduce costs. My parents recently transferred their numbers to my wireless phone plan and are saving between $40 and $50 a month.
If it is wintertime, there is not much you have to heat your home, however, you could turn the thermostat down a couple of degrees and maybe go to bed earlier in order to limit energy usage in terms of both heating and electrical power. The summer time provides a greater possibility to reduce energy costs: air conditioning. I know, sounds painful, but we all grew up without air conditioning, even in very humid locales. Our parents and grandparents proved that a lack of air conditioning will not kill anyone. Depending on where you live and the size of your house, turning off the AC might reduce your energy bill anywhere from $50 to $200 a month.
No more out to eat. Ever. Even fast food that seems cheap. Buy groceries, grow vegetables and even consider limiting your food intake. Most of us eat too much anyway and while it is nice to have seconds and thirds, eating fewer calories means that the amount of money spent on your food budget will go down.
Use common sense
If a purchase can be delayed, delay it. If you can walk or ride your bike, do it. If you do not need new clothes or you can get those clothes at a second-hand shop, do not buy them retail. Desperate times call for desperate measures–no luxury is so important that it cannot be put on hold for a bit.
Hopefully, this event will not happen to you and your family. But in case it does, it is always wise to have a plan in mind.
Article by Stew
Photo by byoogle