When I was listening to Rita Carey’s speak last night, I heard her touch upon some great budgeting advice and it is worth repeating. Rita listed some of the most critical things to do when you first lose your job. One of them is to reassess the family budget. Not just in your head, but on paper. Here is what she recommends with some of my commentary:
1) Make a list of all the expenditures for the month (be honest, food, clothing, gas, mortgage, insurance, hairdresser, cable, phone, heat, electricity, everything)
2) Eliminate as much discretionary spending as possible (do you NEED to keep all those magazine subscriptions, what about the double lattes 4 times a week at Starbucks? do you need those too? The better you are here at cutting costs, the better off you will be in the long run, get serious)
3) How long can you afford to support the expenditures? Be specific, how many months before you have used all your unemployment. Avoid at all costs tapping into your 401K. If it gets to that point, please consult your financial planner who can give you other alternatives.
Now you really know what your time-frame is. This allows you to build a “Plan B”. If by that date, you have not secured employment, what will you do? You will need to implement Pan B now. If you have identified today that you need a holiday retail job in early December…too late. Most of the holiday hiring has already taken place. Sure, some of still available, maybe not the ones that would interest you the most. With a little forethought/planning, you can lineup that Plan B job today, and avoid panic mode.
Eliminating discretionary spending is difficult. I remember when my husband was out of work, he stayed home with the boys 3 days a week to cut our daycare costs. While this was fiscally good, it limited his search capabilities. We canceled the weekly subscription to the local paper. We even cut back on the cable to the minimum tier (we only watched 3 of the 1000 channels anyway). I brought my lunch to work. We hunkered down and boy, was it hard. It was worth the sacrifice. I recommend everyone experiences what it is like to “do without” for awhile.
My mom used to say “do you WANT it or do you NEED it” when we went shopping for clothes. This is a great way to check spending. Whether employed or not, maybe, just maybe, given the way things are today, we should all be asking ourselves “do you WANT that or do you NEED that”.
Hannah Morgan speaks and writes about job search and career strategies. She founded CareerSherpa.net to educate professionals on how to maneuver through today’s job search process. Hannah was nominated as a LinkedIn Top Voice in Job Search and Careers and is a regular contributor to US News & World Report. She has been quoted by media outlets, including Forbes, USA Today, Money Magazine, Huffington Post, as well as many other publications. She is also author of The Infographic Resume and co-author of Social Networking for Business Success.