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Survival tips for the unemployed
Dear Dollar Diva,
My company downsized, and I've been out of work for four months.
The job market is tight, and although I'm looking very hard, I can't
seem to find another job. If I don't find one after my unemployment
compensation runs out, we'll have to tap into our savings.
My husband and I have $25,000 in certificates of deposit,
and we owe $8,500 in credit card debt. My husband thinks we should
use the cash to pay off the debt. I say we should hang on to the
cash because we're going to need it if it takes a long time for
me to find a job. What should we do?
Cathy
Dear Cathy,
Hang on to the cash. You saved it for an emergency and this is it.
Your husband is smart to want to get rid of the credit
card debt, and you should both work on cleaning it up as soon as
this crisis is over.
I don't know how much you'll have to take from savings
each month when the unemployment runs out, but finding work in a
tight job market can take a painfully long time and you want your
savings to last. Here are some tips to help you stretch out your
cash and get through this rough period:
1. Cut living expenses
to the bone. Set up a spending
plan to help you plan your cash flow. Also, check out the
cost-cutting
advice from another person who was laid off as well as a myriad
of money-saving ideas at Frugal
U.
2. Finding a job is
a full-time job. Get up, get dressed for an interview, get on
the phone or the Internet and make it happen -- every day. Buff
up that resume
and check out job
fairs. Let friends, family and all of your professional contacts
know you are on the hunt. Want to make a great first impression
on potential employers? Bankrate offers 20
tips for a successful job interview.
3. Take night classes
to improve your current skills or learn
new ones. You can never be too smart and it'll boost your
confidence to be out and involved.
4. If your savings
get below your comfort level, look for part-time
work. Industries that have peak periods, such as retail businesses
during the holidays and tax-preparers during tax season, always
need good help when the heat is on.
5. If things look bleak,
and there's not enough cash to pay all the bills, pay the secured
debt (mortgage
and car loan) and hold off paying on the unsecured debt (credit
cards and doctor bills) until your fortune turns around. Contact
the creditors you can't pay, explain the situation and assure
them you will resume payments as soon as you find a job.
Being unemployed for a long period is devastating,
but it happens to the best of us. When life slaps us around it helps
to remember that what doesn't kill us makes us stronger. And the
stronger we get, the less we tend to get slapped around.
 DOROTHY
ROSEN has a master's degree in finance, with a specialization in
accounting, from the Kellogg Graduate School at Northwestern University
in Evanston, Ill. Rosen has more than 15 years of experience in
the financial arena, serving in Illinois and Florida as a certified
public accountant, financial consultant, expert witness and educator.
She is owner of Dorothy Rosen, CPA, a public accounting firm that
serves individuals and small businesses.
-- Updated: March 23, 2004
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