Stretching the value of your unemployment check

The process of pounding the pavement for work can cause perpetual frustration for the unemployed. The sometimes fruitless nature of a job search must not blind consumers to the fact that they’ll have to make that unemployment check stretch. To accomplish this, financially sound decisions are necessary.

Reaching backward for relief

The U.S. job market may be slowly improving, but that doesn’t mean the necessity to live frugally on unemployment benefits has gone out the window. Simply cutting out the Starbucks and buying less at the grocery store won’t do it, advises AOL Jobs. To begin with, personal finance expert Jean Chatzky suggests working backward. Once you’ve locked down the essential, fixed expenses, you can focus on what may have to go.

“I think the easiest way to budget is backward,” she says. “This is where my money is going now and then you can make changes.”

Know your expenses outside fixed costs

Austerity measures must be put to action when you have only an unemployment check to rely upon. This goes beyond savings, reminds Chatzky. It’s about taking an ax to those things that aren’t essential, fixed monthly costs in your budget. Rent, mortgage and car payments are inescapable, and they also don’t change from month to month. If public transportation is an option, however, it would be wise to consider the expense of maintaining a vehicle.

That leaves the non-essentials like cable TV and Internet. If you have 600 channels but feel like there’s nothing on most of the time, consider the TV bill carefully. Similarly, the Internet can be a time-waster, although it can also be an invaluable job search tool. If you must cut that one, consider using the Internet at your public library.

“The people that I’ve seen throughout this recession that have the biggest problems are the ones who continued to live as if there were two salaries coming into the family when there was really only one,” says Chatzky.

More revenue-generating, future-preserving ideas

The unemployed may have to consider some difficult questions in order to remain above water financially. Will you rent out that room above the garage, pull the kids out of private school or sell your prized guitar collection?

Taking money out of a retirement account like a 401(k) is an option some consider, although financial experts advise that the unemployed not touch that money unless it is a dire emergency. That nest egg was built for a reason, and the tax penalties can amount to 30 or 40 cents on the dollar for early withdrawal. In the worst case scenario where debt is absolutely smothering, filing for bankruptcy may be an option, although doing so is not as easy as it was a few years ago. Consult with a credit counselor.

Source

AOL Jobs

North Carolina Gov. Bev Perdue on unemployment benefits