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Sudden Unemployment
UNEMPLOYMENT SUPPORT GROUP
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The Question Was Asked in Yahoo Answers…

What do people do when they do not have enough money to pay all their bills?

What do you do when you lose your job and you have no money coming in to pay your bills? You have everything to pay....need medications....need food...just even the basics you can't even buy to survive. What should you do?

 


Best Answer - Chosen by Voters

Unfortunately, some people use credit cards and once they get a job they can start to work on paying down the balance. Welfare is also an option in situations like this. They also apply for unemployment until they can get back on their feet. If there is a food bank in their area, they can get free food from there. People can also turn to family in times like this. I'm helping my mom with gasoline for her car right now. The last resort would be to take valuable things to the pawn shop (not highly recommended). There are all kinds of things one can do.

 



 

Shopaholics Unemployment 

Debt and Anxiety


 

Coping with Unemployment

 

To cope with unemployment or sudden income loss, you can do specific

things to help manage until you find another position or until business picks up.

 

Take Care of Yourself

A job loss may change the way you think about yourself. Developing

positive habits can play a major role in maintaining or regaining

your self-confidence and moving ahead.

 

• Pay special attention to what you eat; emphasize whole grains,

vegetables, and fruits. Go easy on sweets and fats.

• Exercise. A brisk 20-minute walk three to five times a week can do

wonders.

• Avoid excessive use of alcohol and cigarettes.

• Use your time productively. Take time for something you’ve been

wanting to do, like building a tree house or making draperies.

Avoid using daytime television as an escape.

 

Include All Family Members in Open Discussions of the Situation

It may be tempting at first to spare your family the pain of your unemployment.

You probably will not be successful, however, because they can sense that

something has changed. Not being told what is happening can be worse

than hearing the news. Everybody will need to work together to manage

the family’s limited resources. Even the youngest child can turn out lights,

recycle and reuse goods, and find other ways to extend resources.

If you are married, make time to talk with your spouse. Take walks,

have breakfast before everybody else is up, or set aside time after

the children are in bed.

 

Match Spending with Income

One of the most important family discussions will be about spending

priorities. Start the discussion by listing all income that will be received.

(See Pm-1673, Take Control of Your Spending, and Pm-1454a and 1454b,

Money Mechanics: Spending Plans.) Then list regular commitments,

like mortgage or rent, car payments, and other debts. Estimate the

cost of variable expenses, like food, utility payments, and gasoline.

If you have records of those expenses, this job will be easier. Without

records, keeping track for a month or two may be an essential first

step. Now compare income to expenses. Can you meet your regular

commitments and the variable expenses? If the answer is “No,”

where can you cut? (See EDC-58, 66 Ways to Save Money.) Consider

refinancing your home mortgage, perhaps opting for a longer term (30 years).

 

 

When Ellen got home from work, she could sense that something

was wrong. Her husband Jim was home before she was which was

unusual. Their two children, Amy, 17, and Mike, 15, were still at

school, where Amy was involved in basketball practice and Mike in

jazz band rehearsal. Jim was sitting in front of the television set,

which was tuned to a late-afternoon talk show, but he did not seem

to be paying attention to the TV. In fact, he looked sort of dazed,

as if he had just lost his last friend. When Ellen tried to find out what

was going on, it required several attempts to get him to tell her

what had happened. Finally Jim admitted that his manager had

called him in that afternoon and explained that the company was

closing his section as a part of their “rightsizing” efforts, and that

his last day on the job would be two weeks from today.

 

The loss of a job by a wage worker or a crisis in the business

of a self-employed person can be devastating to the individual and

the family. Taking charge in those circumstances means taking

stock of your resources to survive the immediate situation and bring

about a positive future.

 

Community agencies that offer services include: Workforce

Development Centers for unemployment insurance benefits and job

services, the Department of Human Services for a variety of services,

including Food Stamps, income assistance, and Women, Infants, and

Children (WIC). Some churches and other nonprofit groups sponsor

food pantries and thrift shops. Financial counseling and mental health

services also may be available. Your county office of your state can help

you locate services.

 

Benefits

Unemployment also means the loss of benefits, particularly health

and disability insurance. If another worker in the family is eligible

for health insurance through his or her job, you may want family

coverage through that person’s employment. If your company has

more than 20 workers, federal regulations require that you be

permitted to keep your health insurance for up to 18 months.

Although you will have to pay the premiums, they may be cheaper

than private insurance. Keeping the policy in force also has another

advantage. All health insurers doing business in some states must

offer “guaranteed issue” policies. To be eligible for these, you

must have continued your coverage through your former employer.

 

If you have contributed to a 401(k) supplemental retirement program

and have borrowed against your contributions, you will have a

period of time after your job ends to repay the loan. Not repaying

the loan can be costly. The 401(k) contributions are before-tax

monies; unpaid loans from the fund (when you no longer are

employed by the company) will be taxed as income. If you are

under age 59, you face a 10 percent penalty. One good reason for

taking out a home equity loan is to pay off a loan against your

401(k) contributions.

 

Look for Additional Money

If your family’s remaining income cannot cover your needs,

first look for additional funds to tide you over. Could you sell

assets, like an automobile or recreational vehicle? Can you

draw from your savings? A second, riskier option is to use credit

lines that are open to you. Borrowing against your home equity

is a source of cash, but could result in the loss of your dwelling

if you cannot repay the loan. Charging the maximum on credit

cards, another source of credit, may make the situation worse.

Be wary of consolidation loans that roll all of your outstanding

consumer debt into a single loan with one monthly payment.

Make sure the interest rate is the same or lower than the interest

rate on your current loan.

 

Talk to Your Creditors

If it is clear that you will not be able to meet your regular

obligations, contact your creditors (including your mortgage lender)

prior to the due date of your next payment. Almost without

exception, your creditors would rather work with you to schedule

reduced payments than have you miss payments altogether.

The key is to be up front about your financial problems. Be sure

to contact your creditors prior to the date that your debt is turned

over to a collection agency. Some creditors will lower the total

debt if you make good faith efforts to pay off the debt. If the

debt goes to a collection agency, chances of getting the total

debt reduced are nil.

 

Use Company and Local Services

Some companies offer assistance, like career and benefits

counseling. Do not let anger prevent you from taking full

advantage of these services. If your company does not advertise

such assistance, visit with a personnel representative about

your questions.

 

But suppose you have not borrowed against your 401(k) program

and you have the opportunity to withdraw your contributions

in a lump sum. Should you do it? Except under very unusual

circumstances, it is not a good idea, for several reasons. The

money will be taxed as regular income, and you may have to pay

an additional penalty.

 

These steep penalties encourage you to build a substantial

nest egg. Small amounts of money that are allowed to accumulate

over time will create a much larger fund than contributions

invested closer to retirement. you may want (or you may

be required) to move your 401(k) contributions to a rollover

Individual Retirement Account (IRA) when you leave your job.

Check with the personnel department for requirements and

procedures for the rollover, and follow them exactly.

Otherwise, you may make a mistake that requires you to

pay income taxes and penalties without having the use of the money.

 

Make Plans for the Future

You also need to decide about future employment. Some questions

to be answered are:

 

• Do you want another job? Does your family need your income to

make ends meet?

 

• If you need to generate income, what are your chances

of finding a different job near your home?

 

• Do you have the skills and experience needed for the

 job you want? Is a training program available to help

 you prepare for that job?

 

• Will starting a business use your skills and interests

to generate income? Try to prepare for future downturns.

Set a goal to have an amount equal to three to six months’ pay

in savings that you can readily access. Do not carry

balances on credit cards. Pay off other consumer debt quickly.

Keep your job skills up-to-date.

 

Resources:

http://www.extension.iastate.edu/Publications/PM1660I.pdf


 

Coping with Unemployment helpful links

(Google’s Top Links)

 

National Career Development Association

http://www.associationdatabase.com/aws/NCDA/pt/sd/news_article/13786/_PARENT/layout_details/false

 

Stress Taking Charge

http://www.extension.iastate.edu/publications/pm1660i.pdf

 

The Sideroad

http://www.sideroad.com/Career_Advice/coping-unemployment.html

 

Coping with Unemployment

http://www.broadcaster.org.uk/section1/scenarios/unemployment.html

 

Look What I Found In My Brain

http://www.sff.net/people/lucy-snyder/brain/2005/07/coping-with-unemployment.html

 

Boston College

http://www.bc.edu/offices/careers/jobs/unemployment.html

 

CareerPerfect.com

http://www.careerperfect.com/content/topics-unemployment/

 

Blog of the Nation

http://www.npr.org/blogs/talk/2008/12/coping_with_unemployment.html

 

Coping with Unemployment

http://www.net-temps.com/recruiters/infocus/print.htm?id=727

 

Mental Health Week

http://www.cmha.ca/bins/content_page.asp?cid=2-28-62


What happens when you get Unexpected large Bills
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Dealing with Unexpected Large Bills
 
The products and text on this website are for informational purposes only and not
intended to replace the assessment, advice or treatment of a physician or therapist.

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Stop Big Spending -Copyright December 2006