There are few things more stressful than a job search when you are unemployed. While unemployment compensation can help, it rarely—if ever—covers the full range of living expenses faced by people looking for work opportunities.
We live in a society where most people do not necessarily have large revenue reserves to fall back on and debt is common and accepted. This may be fine during times of full employment, but not after a devastating job loss when money becomes tight and must be well-managed. There is little room for error when having to find ways to make ends meet until you find new employment.
So what can you do to remain afloat financially while executing a job search campaign?
Minimize the outflow of financial resources
Proper budgeting is never as important as when having very limited, if any, money coming in monthly. Use a critical eye in evaluating all monthly expenses and decide what is or is not essential or that is discretionary, such as eating meals at restaurants or going to movies and other entertainment.
Reduce or eliminate all nonessential expenses. It is also possible to contact mortgage, auto, or credit card lenders to negotiate temporary payment arrangements. Most lenders will show some flexibility, especially when faced with an unemployed creditor about to default on a loan. There are nonprofit debt consolidation services available to help with this process. Just make sure to ask the right questions when considering this option.
Maximize the Inflow of Financial Resources
Unemployment compensation needs to be secured if the situation warrants it. This is often seen as a “hand-out” to be avoided. However, unemployment compensation is covered through payroll taxes and there is no dishonor in applying for coverage when in need.
Seek out short-term loans from family and friends. Again, a bit awkward, but could produce a temporary life line while looking for work. Also, tapping into savings may be on the list of things to do, as well as IRA plans and even pensions which often carry significant penalties and diminish retirement funds needed for later in life.
Part-time work is an important way to help make ends meet. However, keep in mind that income from part-time employment may impact the payout of unemployment benefits.
Make Careful, Well-informed Decisions about Job Search Campaign Spending
Dealing with high stress is never a good time to make money decisions because critical mistakes can be made that have a negative impact for several years in the future. Facing the prospect of unemployment with no quick solutions in sight may affect decision making, so it is best to take a deep breath and resist any temptation to make major money decisions.
There are a plethora of services available online that promise to create a dynamic, comprehensive job search campaign, complete with a resume, cover letter options, LinkedIn profile, and other materials, as well an effort to blast your resume to job boards worldwide. While many if not most of these services are legitimate, many others are highly questionable. Always be wary of any service that guarantees a high paying job in a short amount of time.
Take Advantage of Income Tax Deductions
There are many expenses related to a job search that are considered to be deductible by the IRS. Costs related to résumé creation, agency fees, travel, and other expenses are often deductible, but it is very important to do some research or ask your tax accountant to see if you qualify. For example, people changing careers, looking for work for the first time, or waiting a long period of time before beginning the job search may not be eligible.
A job search campaign can be challenging for any number of reasons and pressure from a lack of money to live on will just make it worse. However, with proper research, planning, and decision making, money issues can be managed, at least until you find new employment.