Money Talks, So Should You

Q&A: How do I adjust my expenses when searching for a job?

Mechel Glass
by Mechel Glass, Dimespring Contributor  (@CredAbility)

The recession has been officially over for more than two years, but it often doesn’t feel like it, especially if you are still looking for a job.

The U.S. Department of Labor reported on Friday that payrolls only rose by 88,000 workers last month, the smallest gain in nine months. If you are still looking for a new job in your chosen field, how can you reach your goal while still managing your expenses properly and not falling into debt?

READ: You can deduct your job-seeking expenses

Over the past several years, I’ve counseled a lot of people who are unemployed or can only find part-time work. Here are some strategies and tips that I’ve found most helpful:

  • Make looking for a new job your full-time job and have an action plan that involves selling yourself to potential employers. Set a goal for the number of people you will contact, network with or jobs that you apply for in a day or during a week. Striving to reach that goal is a way to motivate you that will lead to a job offer.
  • Consider enlisting a family member or friend who will check your weekly progress. This person can also help keep you motivated if your job search doesn’t proceed as you originally planned.

There is plenty of assistance available to help keep your expenses under control. For example:

  • Call United Way or 211 to find out about other low-cost services, such as day care.
  • If you are paying off a student loan, contact the financial company servicing the loan to find out if you can defer or reduce your payments.
  • Contact the financial company servicing your automobile loan to see if you can make a similar arrangement.
  • Make at least the minimum monthly payments on your credit card accounts. If that is impossible, contact your creditor, explain your loss of income and advise them when you will be able to resume making payments.  
  • If you cannot make your mortgage payment, contact a nonprofit credit counseling organization. They can provide free counseling that may help you find a solution.
  • Consider downsizing your lifestyle. Reduce or eliminate expenses that are not essential, such as club and gym memberships, cable television, bottled water, magazines and movies. Find ways to reduce “everyday” expenses, such as telephone use and dining out at restaurants. For example, families with cell phones for each person may not need a land line and cooking all meals at home could easily save a family hundreds of dollars each month.

READ: How to budget your severance pay after being laid off

Long-Term Money Management Tips

Many people now unemployed or underemployed formerly worked in high-income professional jobs in the mortgage, real estate or securities industries. These jobs are still hard to come by and may not pay as much as your former job.

If you find yourself in this situation, here are some tips that could help with future financial obligations:

  • Develop a budget that reflects your new income. If possible, consider living on 70 percent of your new income, with the remaining 30 percent used for saving for the long term.
  • Consider selling a car with a high monthly payment, and purchase a less expensive model. Utilize the money that would have gone towards your car payment to go towards paying down debts or towards building your savings.
  • If it’s difficult to make your mortgage payment each month and you can live in a smaller home, consider putting your home up for sale. In many parts of the country, home prices are beginning to rise, and selling may be a better long-term solution.

 

Mechel Glass is vice president of community outreach for CredAbility. She is responsible for coordinating community outreach and financial education activities across the agency’s regions and developing new education programs for both classroom settings and online. Glass, a U.S. Army veteran, is also co-author of “The Veteran’s Money Book,” scheduled for publication in April 2014 by Career Press. The book can now be ordered on Amazon.com.