Money During a Job Loss

[jrhendrix]

Hello! Does anyone have any tools or advice for budgeting during a job loss? My husband just found out he is being laid off, and we are going into emergency mode. I make about 1/3 of the family income, and I will still be working during this time. The biggest problem is that our rent (lease ends May 2010) is half of my monthly salary.

[matt]

Will your husband be receiving unemployment payments? I think it is supposed to be like 60% of what you were making at your former job (at least it was when I got fired in 2002, could be different now) So if your husband is getting unemployment you probably shouldn't be too bad off.

As for advice, stop buying anything that isn't necessary to survive (ie anything that isn't food or shelter) with notable exceptions of things that would be of significant help in your husband's job search.

[pochax]

Hello! Does anyone have any tools or advice for budgeting during a job loss? My husband just found out he is being laid off, and we are going into emergency mode. I make about 1/3 of the family income, and I will still be working during this time. The biggest problem is that our rent (lease ends May 2010) is half of my monthly salary.

Agree with matt - prioritize the necessities first (food, utilities, then rent). if you think it is unlikely your husband can get a job within a year, find out how much it is to break the lease on your current residence and consider finding a cheaper one if it makes financial sense to do so. alternatively talk to your landlord about your situation and see if they can lower your rent temporarily until your husband gets a job. your husband's unemployment check will go a long way in helping get you through this. if you have retirement contributions being deducted out of your paycheck, you may want to contact HR about suspending them until your husband's back on the job as well.

[clydewolf]

Jrhendrix,

I am sorry to hear of this job loss.

This is a situation where a solid emergency fund comes in handy.
First you must start right now by getting cheap and begin accumulating a pile of cash.
Drop the monthly expenses that are not necessary. This may mean some cell phone features, some tV cable/satelite, magazines, newspapers, extra out of pocket expenses that become habits, think starbucks, lawn service, home cleaning service, etc. Go through your budget and remove or reduce those things that are not necessary.

Look at your income tax withholding on your income. You may be able to reduce that by completing a new W-4 and giving it to your payroll dept. To help with the W-4, there are 2 calculators that may help:
http://www.paycheckcity.com/W4/w4instruction.asp
http://www.irs.gov/individuals/artic...=96196,00.html

If you have state income tax withheld from your pay, check your state tax website for a similiar calculator.
Having the cash now may be better than a large refund next April.

One word of caution, Unemployment Compensation is taxable at the Federal Level and may be at your state level.

If you are contributing to a 401k plan or other retirement plan at work, consider decreasing this to qualify for the employer matching or eliminate your contributions if needed. Decreasing or Canceling your contributions will increase your take home pay and will also increase your income tax withholding, but will not affect your SS or Medicare tax withholding.

[4jacks]

I make about 1/3 of the family income, and I will still be working during this time. The biggest problem is that our rent (lease ends May 2010) is half of my monthly salary.

That's actually really good! That means at least as far as housing is concerned you were living within your means.

now is the time you go into Emergency Mode. Which is why an Emergency fund is so important. If you don't have an emergency fund, then things are going to be REALLY tight. Hopefully he can get unemployment, and you can make that work until he can find a new job. Otherwise, he's needs to flip burgers in the morning, go to interviews in the afternoon and deliver pizzas at night.

[kwasmrs]

I am unfortunately dealing with the same thing. My husband lost his job in June but savings is starting to run out. I bring home half of our former income so this is a huge hit. Has anyone dealt with this and successfully came out on the other end? It is a bit scary since we are in the middle of a recession, even though my husband is highly qualified for a good job. I forgot to mention we have a 10 month old baby who is still going to day care. If we stop his day care we will lose our spot and it is so difficult to find good childcare with someone I trust.

[biblemoneymatters]

As others have mentioned if you know a job loss is on the horizon, you need to take stock immediately, and start taking steps to avoid a disaster:

1. cut any un-needed expenses or expenses that you can do without for a while Cut cable tv, cell phone services, lawn services, and other convenience and luxury items/services.
2. Set up a strict family budget, and follow it to the T.
3. Start stockpiling cash in an emergency fund - save as much as you can for that rainy day that is coming.
4. When the time comes, file for unemployment.
5. consider finding part time employment or side jobs to fill in the gaps.
6. Brush up on your resume, and start networking..

It's not an easy time by any means, but you can plan ahead and help take a bit of the sting out of it.

I put together a roundup as well with advice from tens of bloggers on what to do in this situation.

http://www.biblemoneymatters.com/200...-laid-off.html

[rubyq]

Great points! One thing about part time jobs is that any earnings you make will reduce your unemployment benefits,so you need to be aware of it since finding a job itself is a full-time job with all the applications, searching, and interviews. However, on the flip side, when I was doing part-time during during my unemployment, I was offered full time job at the firm where I was part-timing.