Finance Tips for the Job Seeker | Articles & Tips | | Rochester




 Articles and Advice

 Finance Tips for the Job Seeker

By Joe Stein

It is obvious to state that one of the largest concerns associated with job loss is the financial hardship that may follow. Job Seekers do not want the stress associated with a difficult financial situation. This additional stress agent will result in a non-confident job search.
Below are some financial items to review in order to better frame the situation of job loss along with some tips to consider.
Items to Remember:
·        Although some companies offer severance (employer provided income for a set number of weeks after job loss), many do not provide this benefit. Even if your company does have a severance policy, it may not apply to you if you have left either voluntarily or “with cause”.
·        COBRA is expensive! COBRA is your opportunity to continue your medical benefits through your previous-employers plan for a set period of time. Sounds good and it is, except for the price. You will be on the hook for the full amount (i.e., no employer portion). If you do have another cheaper alternative, then pursue that. For example, if your spouse works somewhere that provides medical benefits, the loss of employment is typically a “life event” that will allow you to join his or her plan even if it is not open enrollment time.
·        Unemployment will only be a portion of your previous income for a set period of time. It will also be provided with the commitment that you will be actively searching for new employment.
·        It will be tempting to pay your bills with a credit card in order to save your cash for discretionary spending. Remember, at some point that credit card spending will result in higher balances, higher minimum payment, and perhaps a higher interest rate.
·        A Job Search may take some time especially when the economic conditions are not optimal. The traditional rule of thumb for non-entry level positions is one month for every $10,000 in salary desired. So, if you are seeking a position that will pay $50,000, on average you are facing a 5-month job search. Are you financially prepared for this to occur?
Tips to Help Cushion the Blow:
·        Most Americans are either living at or beyond their means financially. This reality does not provide the average job seeker with a “safety net” to help cope with the decrease in financial resources associated with the loss of employment. Begin the process of living on the necessities far before your job loss becomes a reality. This will help to condition you to the lifestyle of job loss and will also provide you a bit of a cushion that will come in handy during your job search.
·        Create a firm financial budget. The art of balancing your income with your expenses will become a necessity. Make a list of all expenses and compare this to the income you will be receiving. Begin the process of removing non-necessity expenses such as eating out, cable/satellite TV, cellular phone, etc., until this number meets your income, or comes as close as possible. Don’t just do this for today, but project your situation 3 and 6 months out.
·        Change your habits. With your job loss, you should be at home more even though your job search should take up a significant portion of your week. There will now be time to review the sale ads, clip coupons, and prepare healthy but economical home meals in order to save money.
·        Seek alternative ways to generate income. This may mean finding a part-time job (depending on its impact to your unemployment), having your children or spouse seek employment, or even holding garage sales/EBay listings.
·        Communicate with your children by letting them know of your new financial situation. Have them fully participate in the budget, whether it is by working a part-time/odd jobs or a reduction/elimination of allowance. Let them understand that things will be different and why.
·        Address with other family members that items such as birthday or Christmas presents may be reduced or eliminated based on your situation.
·        Talk to you lenders and your utility companies. Inform them of your current employment situation and, if needed, attempt to arrange an alternative payment schedule that better fits your budget.
We all know that the sudden loss of employment can be a traumatic life event. The good news is that, although it may begin some difficult economic times, it does not have to be as devastating as it initially would appear. With some sound budgeting and decision-making, you can create a livable situation until finding that new job you always wanted.
As always, best of luck in your job search.