Surviving Unemployment or Underemployment

At some point in life, many of us in the workforce will experience a termination, layoff or downsizing. In fact, in 2005, the average national unemployment rate stood at 5.1% according to the Bureau of Labor Statistics.

No matter what the warning signs are, losing your job or becoming underemployed still comes as a shock. But don't panic. Help is out there. Debt counseling services, government employment agencies, and other career development resources can help you get back on your feet. Before you make any financial decisions, contact a Consumer Credit Counseling Services (CCCS) agency to make sure you are exploring all of your budget and debt options. CCCS agencies like ours provide quality debt counseling to meet the needs of your personal financial situation.

First things first – save money now

• Don't rely on credit cards to cover your expenses. Before you do anything else, sit down and carefully organize your finances in a detailed household budget by figuring out exactly how much money is coming in and going out. Pare down the most unnecessary expenses first, such as eating out on a regular basis or spending money on expensive entertainment. Then look more closely at your budget and consider ways you can begin saving money every day on everything from household expenses to transportation.
• If you lose your job, apply for unemployment insurance, or visit the local employment commission for help in job prospecting. Don't be ashamed. After all, these are your tax dollars at work.
• If your employer offers a severance package, take it home and review it carefully - and perhaps contact an attorney. Often, there is negotiating room for prorated bonuses and unused vacation and comp time.

Manage your priorities

During a spell of unemployment or underemployment, it's important to review what payments should be made first. Here are a few quick debt management tips:

• Keep your health insurance. Some companies will allow former employees to make payments to continue their coverage. Consider getting on your spouse's health plan or apply for government-assisted health insurance through the COBRA program.
• Pay secured debts, such as your mortgage first.
• If debt management is a concern, contact your credit card issuers and request an interest-rate reduction. Many have programs that help customers manage payments while unemployed.
• If you are receiving harassing phone calls from credit card companies and other creditors, consider debt counseling from one of our CCCS agency counselors.

Generally speaking, stay positive. Expand your job hunt. Explore new avenues for getting your résumé in front of potential employers. In addition to checking job listings in the local newspaper, post your résumé on Web sites such as monster.com and hotjobs.com. Also consider part-time employment during the lull. It may pay more than unemployment checks.

By reviewing your personal financial situation with a CCCS debt counselor who is professionally trained and certified by the National Foundation for Credit Counseling, you may find creative ways to save money or manage debt more easily. Our CCCS debt counselors will help you create an emergency household budget, and provide information on other resources dedicated to helping consumers who are seeking employment.