Budget? I'm Unemployed - What Budget?
Posted: Tuesday, January 27, 2009
by Ben Ramsey
Ramsey Solutions
Maintaining a budget is difficult under normal circumstances, but trying to balance your checkbook, compute your finances, and make ends meet when you're unemployed is definitely a challenge. If you were financially savvy when you had a job (that leaves me out) you might already have a budget in place that you can live with by making a few cut backs. For people like me, however, attempting to balance your budget will most likely be very painful.
The first thing you need to do is to make a list of your daily, monthly, weekly and yearly expenses. You may be saying "I know what my expenses are", but if your like me you may have a water bill that only arrives quarterly. Remembering the quarterly or annual bills can save you the headache of remembering after the fact. You may also be asking "Why do I need to list my daily expenses?" The reason is It is important that you recall all of the items (including luxuries) that you spend money on, even if it's coffee from the convenience store every morning when you pick up the newspaper. You need to mentally go through each day and write down as much of your spending as you can.This exercise will help you see where cuts can be made - when I did this I was amazed at how long my daily list was.
Next you need to set up a system to determine what are absolute necessities and what you can possibly do without. When I made my list I put a "N" next to those items that were absolutely necessary (power, water, food...), a "DN" next to items I really don't need (starbuck coffee, copy of People magazine, chineese for lunch...), and finally I put a "U" next to items I wasn't sure about. This system really helped me see where I could cut corners to put more money in my budget for the necessities, as well as have some left over for the undecided (an occasional night out...). Once you go through the list once, you probably won't need to do it again. In my case, that one time was a wake up call to be more careful with my money. Especially now that I'm unemployed.
Some things I would not recommend getting rid of. Mainly the Internet. The Internet can be your life line to jobs that you would otherwise not know about. If I didn't have the Internet to look on sites such as Monster.com or Careerbuilder.com, I would miss out on literally dozens of openings every day. When deciding what to put a "DN" beside of, look at the long term ramifications as well as the immediate ones. Canceling an Internet bill may seem like a good way to have some extra cash in your account, but doing so may delay the amount of time it takes to find a job.
And finally, once you prioritized your expenses and decide what you really don't need take a look at whatever income you do have coming in (unemployment insurance, child support...). Maybe you have enough coming in to explore other options, such as starting your own business or going back to school. There's actually programs to help you do either of these things. Check with your local Employment Security Commission for more details. If you're like me and notice that your income isn't going to quite cut it, you may need to consider a part-time job through a temporary agency to make ends meet. That too can be a challenge though, there are a lot of people out there competing for any position that out there.
Even if you have to take a job that requires minimal skills to keep your budget afloat, remember it is only temporary. You will still be looking for a job that matches your background and skill set, but you until you find it you need to take whatever is out there. I have a MBA and 18 years in the Learning and Development field, but there's not many of jobs out there right now that needs that expertise - and it seems that when one is posted it's filled before I have a chance to get my hopes up. So now I find myself applying to temporary agencies willing to do anything to bring money in. As the old saying goes - desperate times calls for desperate measures. And as sad as it is, these are definitely desperate times.
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Top-level comments on this article: (3 total)Practical article Ben. When I was unemployed, I struggled with the choice between taking a low paying job (that still wouldn't make the ends meet) or spending full time going after a job situation that could put things back on track. It's a tough spot to be in. I hope you find what you need. Thanks for writing. Steve
Hi Ben, this is great advice! That list sure does point out frivilous spending. yikes! I'm praying you find a job soon, thanks for sharing this tips and being a source of encouragement in these discouraging times. God bless!
Ben, good sound advice. Your Internet capable, how many aren't? How many can't afford it any longer or even a phone. As long as you have resources hope is alive. Yet once that collector calls and you run into problems, a whole new outlook. I will also say a prayer for all of us. I'm a realist and perhaps a little harder on outlook but dad always said a bird in the hand in always worth more then one in the bush. Good luck and wishes.
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