If you ever feel like you’re at the end of your rope… tie a knot baby, and hold on tight!
– Steven Tyler, Aerosmith
It seems that the quote comes originally from Roosevelt, but I remember it from an Aerosmith concert in the mid-1990s. Google didn’t exist yet, so, to me, Steven Tyler owns the quote.

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.
(* This was originally written in 2007 but, with few edits, it is still applicable today. As COVID-19 continues to make 2020 terrible, this may help you or someone you love.)
First off, I’d break your plan of attack into three phases:
Phase 1 (Immediate Term) – Desperation mode
Before you even begin this phase, I hope you have an emergency fund.
Step 1 – Cut costs
Look around at everything that costs you money. Try to either eliminate it or bring the costs to a minimum.
- Extras – I would quit most any subscription service… Netflix, Cable TV, Vogue Magazine… all gone. (In COVID-19 world, this advice may not be the best, it gets better.)
- 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. Eggs can be a good cheap option as well. Chicken is extremely cheap as well. We are lucky that food costs in 2020 are low if you are flexible on nutrition for the short term.
- Insurance – Use COBRA to get health insurance unless you have a better option such as a spouse.
- Housing – The woman in the email had a home and mortgage payments. If you own a home, can you get a roommate? Is AirBnb an option? Is it possible to sell it and downsize or rent?
Step 2 – Earn an income
It’s impossible to make payments on your home without 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. With unemployment, 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 poor motivation for me to take any available work, which would normally be my instinct. For example, if I took a minimum wage job, I would be working 40 hours a week for literally no money. It’s a strange system in my opinion.
- 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 McDonald’s 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 leftover food home. It wasn’t uncommon for me to bring home 12 calzones a night that would have otherwise been thrown out. They went into the freezer and our family had food for months.
Focus on what skills you have. Maybe you can teach a class on something better than most people. Maybe you can create logos on Fiverr. One benefit of 2020 over 2007 is that we have a robust gig economy. I make money dog sitting.
- Talk to Friends – Tap your social network and see if you can find a job there. I once found a job for a friend through another friend… and none of it happened through a social network. It was talking to people in real life.
- Look for Jobs Online – Look online at Monster, CareerBuilder, and Indeed. LinkedIn is an obvious way to go.
- Blogging – Blogging for money is possible, but expect to earn somewhere around 5 to 10 cents per hour spent for the first 5 months. It took me a year of 2 hours a night (on average) to make a thousand dollars a month… but it was much, much easier in 2007. Most people spend their time on social networks, not independent blogs. Thirteen years later and it’s a struggle to grow beyond a thousand a month… and I know a lot of bloggers who would love to make a couple of hundred dollars a month.
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. (Note: These articles are in need of updating. They are good motivation, but there is better practical advice out there.)
- Consider selling things you have of value – This is a tough decision and must be made on an item by item basis. You may have a few hundred dollars in stuff from eBay, Craigslist, Facebook Marketplace, or a garage sale.
Step 3 – Take Care of Yourself
It’s more important now than ever. I originally meant that because losing a job or dealing with any kind of financial hardship is tough. Coronavirus turns it up a couple of notches.
- Pay Attention to Your Health – It’s easy to get depressed when in this desperation mode.
- Be Social – When I was laid off in 2001, I was lucky enough to live with roommates. They pushed me to be social when I worried about the expense of the restaurant meal or drinks at a bar.
- Exercise – My apartment building also had a gym, so I scheduled a block time there every day. 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 (or even better than) some anti-depressants.
Phase 2 – Recovery
Hopefully, you won’t be without a steady income for a long time. I had to go for two years until software engineering jobs came back. That’s a long time to try to get by on emergency fund.
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 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 get back to where you were.
Phase 3 – Prevention
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 – prevention.
You want to prevent this situation from happening again. You want to build back up that emergency fund. I prevented a total loss of income by building passive income streams. That way if I lose one, the others can keep me afloat. Looking back at this 13 years later, my wife and I have a very solid net worth, great retirement income, some rental properties, equities, side hustles (blogging, dog sitting). We can be financially independent in a couple of weeks by eliminating extra education costs.
Originally published May 15-16, 2007
For fun here are a couple of the outdated references I removed:
– Vonage’s cheap per minute VOIP home line instead of a traditional landline
– Advice of getting rid of your cell phone. Now just get a cheaper phone and a cheaper plan.
– Use HotJobs as a source to find new jobs