Being Jobless Does Not Mean You Are Helpless

Being Jobless Does Not Mean You Are Helpless
With the current economy, you or someone you know may be without a job to support their family. Whether through a lay-off, furlough or a business closing, times are tough. However, just because you may be jobless does not mean you are helpless. According to Dr. Rebecca J. Travnichek, Family Financial Education for University of Missouri Extension, you should keep a clear head, don’t panic, and don’t do anything drastic. In a recent article in the Board of Certified Financial Planners (CFP®) electronic newsletter, Eleanor Blayney, CFP® and the CFP Board’s Consumer Advocate, “if you are one of the many unfortunate unemployed, your first instinct may be to panic, then to sink into depression as dark and deep as the economic hole our nation seems to be in.” Please resist this natural inclination to batten down the hatches and ignore the rest of the world. For the future of you and your family, you need to keep your eyes wide open. Look at everything clearly and realistically; to outside sources of help, as well to your own resources.
Here are some suggestions shared by Ms. Blayney in her article:
1. Start with reaching out. You need to talk to your ex-, or soon to be ex-employer, to understand exactly what benefits and assistance are available to you. Are you eligible for any benefits, such as unpaid sick leave, continued health care coverage through COBRA, programs for displaced workers or job search assistance? If it was the economy and not you that led to the elimination of your job, be sure to ask your boss for some reference letters; he or she may be pretty busy with similar requests, so you might offer to write the letters yourself for his or her signature.
2. You now have a new full-time job—to identify and find your next job. If your former job wasn’t great—not exactly what you wanted to do and not what you needed (and deserved) to be paid—now is the time to get ready for the right job. Whom do you need to talk to? Start by gathering information from people who work in your targeted field before you actually apply for a job. What skills do you need to acquire or brush up on to take that next step? Where, and how, do you need to live to be available for that next opportunity? Do you need to relocate? Do you need to downsize?
3. Don’t forget to keep your family up-to-date about your situation. Maybe you were previously working so hard there was no time for family meetings, now is the time to hold frequent and regular talks around the kitchen table. Enlist your family’s support for your efforts; telling them how you will go about finding another job will make you accountable and thereby more motivated. Children will want to know how your job loss impacts them: does this mean a move or new school? Will their activities with their friends be affected? Be optimistic, but also be factual and specific. Don’t sugarcoat the situation. Make sure the family understands the need for some belt-tightening.
4. Be realistic—the job search is going to take time. The amount recommended by financial professionals for a family emergency fund used to be three to six months’ expenses. New recommendations are six to eight months’ expenses. For those who have been living paycheck to paycheck, this advice may seem like being told to “close the barn door after the horse is out,” so some additional horse-finding measures may be necessary.
5. This is the time to know your financial numbers inside and out. What does it cost you to live each month? Of those expenses, which are fixed (must be paid in a given amount), which are variable but nondiscretionary (flexible amount but must be paid), and which are purely discretionary (you have the choice to spend or not spend)? The last two categories are where you have some flexibility in your decisions. When you have no or now limited outside income, you can at least “pay yourself” by analyzing your spending habits and current expenses. If you have fixed expenses—rent or mortgage, an auto loan, credit card minimums—that cannot be cut and cannot be paid in the short term, talk to your creditors, and contact them early. Explain your unemployment situation and ask if alternative payment arrangements might be considered. Don’t wait until you get a call from a collection agent.
6. Finally, seek professional advice, particularly if you are thinking of making any big changes—moving, selling assets, dropping insurance coverage, defaulting on debt—as a result of losing your income. To find a financial planning professional qualified by experience, education, and ethical standards, go to CFP Board’s Web site www.CFP.net where you can search for a CERTIFIED FINANCIAL PLANNER™ professional in good standing and close to where you live.
If you desire further information on this or any other topic, contact your local University of Missouri Extension office. To contact Dr. Rebecca J. Travnichek, Family Financial Education Specialist, e-mail her at TravnichekR@missouri.edu or call the Andrew County Extension Office at 816.324.3147.