Laid Off? Some Survival Tips.

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I got a sad email from Candi yesterday (name changed to protect the innocent):

[blockquote]Help, I have been layed off and will no longer be able to keep up on the mortgages (2) or bills. Family of 5. Husband works still but I made so much money previously that our income is cut more than in half. I was told by someone that the world is going to h*ll and we need to sell everything and stock up on food and prepare to just survive. I am afraid for us.[/blockquote]

The easiest way out is to simply move to Belgium and sell your children You'll make money while reducing your cost of living. I joke (don't even try it's illegal), but in times like this I try to remind myself that laughter is free.

On a serious note, I got a similar e-mail last May. It led me to write these tips. I am surprised that many of the tips still apply. That should go a long way towards righting the ship.

I did list some ways to save money, but here are some more ways to save on clothing, movies, music, television, and books, razors, hobbies, gas, housing, groceries, and almost anything on the Internet.

I'd focus on some of the big things. I don't want to go all Suze Orman or Larry Winget on you, but the two mortgages is a problem. Are you at least renting out one of the places? Some income to offset the mortgage is better than none. Can you sell one, even if at a loss?

I don't have a lot more information to work with here. One thought is that if you have new cars of significant value you may be able to sell them and pick up servicable cheap ones (a used Kia or something). It will get you from point A to point B and either put money in your pockets or reduce your payments. Another thought is to look at refinancing the mortgages at today's low rates. If the homes lost a lot in value, it might not help, but it's worth looking at.

I don't know what Candi's job was or what her prospects are going forward. It's hard without knowing a profession or region. I just hope she isn't the only lumberjack living in New York City or a similar situation where you would expect jobs to be extremely rare.

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Posted on December 17, 2008.

End of Your Rope? Phases 2 and 3

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Yesterday I wrote about some emergency measures you should consider if you find yourself without an income. With any luck you won't have to live without a steady income for a long time. I really hope that you don't have to go two years like I had to.

If you took my advice and ended up getting two minimum wage jobs, chances are you are going to burn out before too long. It's almost like treading water, you just want to prevent yourself from sinking. Once you've stopped the bleeding, it's time to be begin the recovery phase. The recovery phase is where you will need to spend any spare time looking for one job that used to pay like the one you previously had. That means making a huge effort to apply for new jobs in your industry. You may find that you need to learn new skills or require additional education. It will be hard to do this while you are working two jobs, but it's necessary to complete this recovery process.

If you've been able to secure a salary near what you had before the job loss, you are ready to enter the third phase. The main idea with this phase is prevention. You want to prevent this situation from happening again. One way is to start up an emergency fund that can you get you by if this were to happen again. Another way that I'm preventing a total loss of income is by looking for and building alternative income streams. That way if I lose one, the others can keep me afloat.

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Posted on May 16, 2007.

End of Your Rope? Tie a Knot and Hang on Tight.

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Yesterday I explained how I got an e-mail from a woman who lost her job and the feelings that I went through in a similar situation. Today, I'll detail what I did about it then and what I'd do about it today.

First off, I'd break your plan of attack into three phases:

Phase 1 (Immediate Term) - Desperation mode

1) Cut costs - The basic concept here is to look around at everything that costs you money and either eliminate it or make sure it costs you the minimum

  • Extras - I would quit most any subscription service... Netflix, Cable TV, Vogue Magazine... all gone.
  • Utilities - Keep the high-speed Internet connection (as you can use it to make money, find a job, or learn how to save more money), but kill your phone line with the telecom company. I would get Vonage ($15 for 500 minutes a month), or better yet Skype ($68/yr for SkypeIn and SkypeOut - that's just over $5 a month). Drop the cell phone.
  • Food - I'm not entirely joking, but I'd go on the Survivor diet - lots of white rice and water. Perhaps some Ramen noodles if you want to splurge. I'd mix some beans in as they are a great source of protein and fiber and are relatively cheap. See also Nourishment on a Desperate Income from The Simple Dollar.
  • Insurance - Use Cobra to get health insurance unless you have a better option.
  • Housing - Looks like you own your home. How about getting a roommate? You could cut that mortgage problem in half.

2) Earn an income - You can't continue making payments on your home, if you don't have money coming in.

  • Look into Unemployment - This is an obvious first step, I hope. When I was jobless, my unemployment benefit was quite large as I was downsized from a high paying job. The downside of this is that it discouraged me from looking for work. The way unemployment works is that if you make $50 that week, you report it and then you get $50 less for the week. This extends your time on unemployment though, so if you are still unemployed when your unemployment would have run out, you'll still have that $50 to get the following week. This was not good motivation for me to find just any work. If I took a minimum wage job, I would be working 40/hrs a week to not make a cent more that week. The system seems backwards if you ask me.
  • Make Extra Money - See if there some ways you can make an buck on the side. There's another great example at Get Rich Slowly.
  • Think about small jobs - Don't be afraid to work double shifts at McDonalds or some other fast food place. I used to work at a fast food place and I actually thought it was fun (in high school at least). The bonus is that if you work the night shift, you can often bring some left over food home. It wasn't uncommon for me to bring home 12 calzones a night that would have otherwise been thrown out.
  • Talk to Friends - Tap your social network and see if you can find a job through that means.
  • Look for Jobs Online - Look online at Monster.com, CareerBuilder, and HotJobs.
  • Blogging - Blogging for money is possible, but expect to earn somewhere around 5 to 10 cents per hour spent for the first 3 months. It's taken me a year of 2 hours a night (on average) to make what I make now. Consider this article on why Blogging is not the answer. Nonetheless, if you are looking into blogging as a longer term solution here are ten reasons to be a personal finance blogger. And here is a little guide to being a successful blogger.
  • Consider selling things you have of value - This is a tough decision and must be made on an item by item basis. Still, you may find that you have spare books, DVDs, etc. that could make money on Ebay or a garage sale, etc.

3) Take Care of Yourself - It's more important now than ever

  • Pay Attention to Your Health - I mentioned yesterday that it's easy to get depressed when in this desperation mode.
  • Be Social - I was lucky enough to live with roommates which kept me social.
  • Exercise - My apartment building also had a gym, so I used some of the extra time there. If you are on the cheap diet I mentioned above, you should be working out. Exercising releases endorphins which will make you feel better. Studies show exercise works as well as some anti-depressants.

That's the end of my plan for phase 1, go see phases 2 and 3.

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Last updated on December 16, 2008.

I Lost My Job

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Last week, on May 8th, Lazy Man and Money turned one year old. In that time I have received nearly 1000 e-mails, but none like the one I received on that day:

Hi Lazy man, tell me how do you create a blog to get help to pay my bills. I was recently layed off work because of budget cuts with a non profit organizations that I was working for and I just purchased a home, and would like to keep it. I have been applying for job but have not be successful just yet need some help. Thanks, [Joyce, the made up name that I will call her to protect her anonymity].

I don't possess the writing skills to explain how this impacted me emotionally. The desperation in the e-mail just oozed into all my waking thoughts. That night, I ended up getting about 4.5 hours of sleep instead of usual 6.5. I have mentioned this a couple of times in passing, but I've been pretty close to this situation. No, I didn't own a home, but I was nearly at the point where my checking account was down to zero. I would have had to start withdrawing from my retirement accounts to pay the rent. It was back in the dot-com boom in 2001. I went 2 years without finding steady work as a software engineer. I had found three or four short-term contract jobs during that time - the longest being one month. I had been employed at another company for three months, before they cut their headcount from 100 people to 6 (I had made the first several cuts, but not the last one). I was not one of the 6.

Here are some thoughts I had after digging up the pain of that experience:

It's incredible hard to have any kind of social life when your friends typically want to go out to a fancy restaurant. I remember one time getting invited to dinner amongst friends, and, in not one of my better moments, wrote a pretty scathing response, questioning why society dictates that we must go out and spend 10 times the cost for food at a restaurant (I still feel that way, but things change considerably when you have money in the budget for the experience). It was even harder trying to date.

If you don't have an income, there's a constant process in your head that calculating costs. With the dot com bust, everyone talked about "burn rates." And now it wasn't my company having a burn rate - it was me! Even today I count every cost. The skill I needed to get by back then, has become a habit that I can't drop. Today, I often annoy myself with ultra-frugal thoughts.

Everything can easily spiral downward leading you into a deep depression. Not having an income is terribly depressing in it's own. Not being able to do things with friends and getting angry at the situation doesn't make things better. Whenever someone buys themselves something nice, it draws resentment from deep inside. It doesn't get much worse than being alone and pennyless.

The story for me has a happy ending. I found a part-time job in the autumn of 2003 that paid more than many full-time jobs. In Feb. 2004, a contact from the old dot-bomb asked me if I was available to work at a new start-up. Knowing the people, I jumped on the opportunity and made more than average person, but still a disappointing salary for a software engineer. In the same month, I met a woman whom I would eventually ask to marry me. Last year, she got a big promotion to move out to Silicon Valley. As a software engineer, I saw my salary jump when we got out here as well. Now that things are moving in a much more positive direction, I'm taking action by trying to grow my alternative income sources. If put in a similar situation, I'll be much better equiped to handle it.

So what did I learn that I can pass on to Joyce... these survival tips.

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Last updated on February 18, 2009.

 
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