smart spending

15 tips to survive a job loss

Highlights
  • Some 3.6 million jobs have been lost since the start of this recession.
  • Housing, food, utilities and medicine should get first priority.
  • Apply for government benefits right away.

The economy has taken a nose dive in recent months, and it's taken more than a few jobs with it.

The unemployment rate for January was pegged at 7.6 percent by the Bureau of Labor Statistics, which says 3.6 million jobs have been lost since the start of the recession.

And many experts feel the situation will get worse before it gets better.

If you've recently lost your job, it's time to get your finances in order. Here are a few tips from the experts to help you address your financial obligations -- and keep your credit score intact -- while you work to get back on your feet.

1. Don't burn bridges. It's tempting to take out your frustration on your boss, but he is likely to be a reference for your next job -- or may even have a budget to hire you for part-time contract work. "If you make an embarrassing exit, it's not going to stay within those four walls," says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. "It's possible that others in your industry will find out -- including the very people [with whom] you hope to find your new job." Stay professional throughout the process -- even if others don't do the same.

2. Seek help from your former employer. Your company may offer a range of services to help you get back on your feet, from workshops to retooling your resume to classes on how to look for jobs.

3. Take stock. When you've lost your job, it's more important than ever to have a handle on your finances. Tally up your monthly expenses and create a survival budget to get a sense of how long your savings can keep you afloat.If you've been a diligent saver and you've got investments that won't be hard to liquidate, you may find that you have more time to find a job than you thought. "Individuals' fears tend to be greater than reality," says Michael Haubrich, president of the Financial Service Group. "When you look at all of your available lines of credit, the equity in your home and your cash available, you may find you have more time than you think to be strategic in your job search."

4. Apply for government benefits. It can feel embarrassing to head to the unemployment office if you've been laid off or fired. But don't delay, says Roberta Matuson, president of Human Resource Solutions. "You've worked for it and you've earned it," she says. "Apply right away, because it will take time to get processed."

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5. Cut back. This may seem obvious, but look for hidden expenses you may be able to eliminate. Consider dropping or reducing your cable, movie subscriptions and cell phone minutes. "That doesn't mean that you can't give yourself occasional permission to spend," says Galia Gichon, founder of Down-To-Earth Finance, "but make sure you're making those decisions consciously."

6. Get buy-in from your family. Your children don't have to understand the minutia of unemployment benefits and credit card debt to appreciate the importance of cutting back, Cunningham says."People think they can protect their children by not discussing finances around them, but a joint effort can yield great results," she says. "You can put it in terms they can understand -- like instead of ordering out pizza three times a week, maybe you only do it once."

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