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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