Good financial practices are important for everyone, but especially for the unemployed. Here are a few tips to help you make the most of your money until you are able to find another job. Being out of a job is scary. When you’re unemployed, you no longer have a reliable source of income, and there is no telling when you will find a new job, either. When you have no idea where your next paycheck will come from, let alone when, it is especially important to have a good handle on your finances. Here are a few tips to help you manage your finances as efficiently as possible until you find another job.
Make a prioritized list of your bills and spending

Personal Finance for the Unemployed
The very first thing you need to do, if you don’t already have this information written down as part of your budget, is to make a list of everything you spend money on each month. Put the most important expenses at the top of the list, and the least important at the bottom of the list. For instance, any secured loans, such as your mortgage or a car loan, go at the top of the list, because these things can be taken away from you if you don’t pay. Lights, heat, food, and other important necessities should come next. In the middle of the list should be unsecured loans, such as credit cards, because the things you bought with the money cannot be repossessed if you fail to pay. At the very bottom of the list come the unnecessary expenses, such as eating out, entertainment, cell phones, and so on. If things get tight later on, and you don’t have money to pay all of your bills, this list will help you identify which ones are most important. For instance, even if the lights get turned off, that’s easier to rectify than if you get kicked out of your home.
Eliminate all unnecessary expenses
Once you’ve created your list of expenses, identify everything on the list that isn’t absolutely necessary, and eliminate it. This includes things like cell phones, cable, eating out, and entertainment such as magazine subscriptions, Netflix, or going to movies. You should also take a hard look at your food bill, too, and see if there’s anything you can do to pare it down — even if that means eating a lot of mac and cheese and ramen noodles until you find a job again. Don’t let yourself feel like eliminating these expenses means you can’t have any fun, though. Remember, there are free or practically free ways to replace some of these luxuries. For instance, you can usually check out movies and music at no charge from your library, even if you have to wait a little while to get them because of long hold lists. You can also read many of your favorite magazines on the Internet, or go to the library and read them there.
Don’t go without health insurance
Although it may be tempting to go without health insurance in order to save money, don’t — doing so can have disastrous results. For instance, if you get really sick while you are uninsured, not only are you without a job, but you could also be suddenly faced with thousands of dollars in medical bills. Instead, take advantage of COBRA or find a way to get cheap health insurance coverage, such as switching to high deductibles. This quick health insurance guide will help you figure out what to do.
See if you can save money on your taxes
If you’ve been unemployed for a while, you may be able to save money when you file your taxes, so be sure to check into tax breaks for the unemployed. Saving money on your taxes may mean a larger tax return, which is more money in your pocket when you need it most. For instance, you may be able to deduct job search expenses or the cost of moving in order to take a new job.
Find ways to raise cash
When you are out of work, cash is the most important thing. Don’t make extra payments on your car or credit cards, and if things get tight, see how much money you can bring in by selling things. For instance, you can have a garage sale or sell things on Craigslist, or even sell your more valuable items on eBay. There are also many small jobs you can do to make extra money each month. Remember, the more cash you bring in, the longer you can make your savings last.
Use all available resources

Personal Finance for the Unemployed
The first resource to take advantage of is unemployment. A lot of people worry that unemployment is some form of welfare, which it is not — employers basically pay into the system, which then pays out if you get laid off for whatever reason. It also won’t affect your credit, so there is literally no reason not to take it. It will only be a percentage of your paycheck, and may only give you an extra $200 or $300 a month, but whatever amount you get is that much less you’ll have to use of your savings. Unemployment usually only lasts 26 weeks, however, and isn’t available to you if you quit your job voluntarily or if you got fired for something you did. If you can’t get unemployment, or if yours has run out, there are other resources to help support you until you find work. Don’t be afraid to apply for food stamps, as a couple hundred dollars a month will help you to stay out of your savings and pay other bills until you find work. Also find out where food banks are located in your area, so that you never have to decide between paying a bill and feeding your family.
Don’t add to your debt or borrow against your retirement unless it’s an emergency
One major rule of thumb is to never increase your debt while you are unemployed unless there is no other way. This means you should not rely on credit cards to help you maintain the lifestyle you were used to before you lost your job, but also that you should never dip into your home equity for anything short of a dire emergency. Also, never withdraw money from your retirement account or from other investments unless you absolutely have to. Taking money from your 401(k) can cost you a lot in taxes and early withdrawal penalties. Also, taking just $10,000 out of your account now can cost you more than 10 times that in 30 years.
Be smart!
Being out of work is scary, because you never know when you’ll be able to find another job. It may only take a few weeks before you find something else, but then again, it could be months. Your best approach is to minimize your spending as much as possible now, be as smart as you can with your money, and settle in for the long haul, just in case!
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