Unemployment Adventures: Dealing with Debt and Cash Flow

[Editor’s Note: The following is a guest post by Elizabeth West. She’s been recently unemployed and has agreed to share her experience with Lazy Man and Money readers. You can catch more of her writing at Graphomaniac and follow her on Twitter as DameWritesalot.]

Being unemployed means I can’t pay my bills as easily as I did before.  The money coming in, even on unemployment insurance (UI) payments, is sharply reduced.  It’s oh so easy to get behind.

While it’s tempting to just shove bills into a file folder and not even open them, it’s not a good idea.   That won’t stop them from coming.  It also won’t stop them from piling up.  So what’s a girl to do?

First, call creditors and let them know what’s going on.  Many times they will work with you.  Mortgage companies are a pain—they have illogical policies on accepting partial payments of any kind.  “Just tack it onto the next payment” doesn’t work very well when it takes two checks to make the payment in the first place.  But calling them is better than not saying anything.

Tax debt?  Believe it or not, the IRS people are super nice if you call and talk to them!  I got on a payment plan and was actually able to negotiate something affordable.  So many people are afraid of the IRS, but the agency is made up of human beings.  They do understand that things are rough sometimes, and they will work with you.

Second, I’m trying to keep very good records of what I paid and what I owe.  Paper gets messy, so I try to do as much as possible electronically.  A spreadsheet is a good tool for tracking payments.  Microsoft Office has lots of free templates to download.

I also save my confirmation pages in case a payment doesn’t go through.  I use CutePDF^TM Writer, a free tool, to save them as a .pdf file on my computer.  It works for web pages, Word docs and other files.  In case there is a dispute, I can produce the confirmation.

Third, when I can, I pay something, even if it’s only a few bucks.  If I can sweeten the minimum payment, that’s even better.  At least having a minimum that I can actually reach makes me feel less like a total deadbeat loser.

Student loan debt is another animal entirely.  Right now, I’m on a deferment.  I had trouble paying anything for so long, because my income potential is rather limited.   I hope there is a change in the future.  Otherwise I’ll die still owing money.

Getting debt paid down is one thing.  Coming up with the cash flow when you’re unemployed is another.  Sure, you can take a part-time job while looking for something better, but for me, this is difficult.  Part-time jobs are 20 or 30 hours a week tops, and if that’s only $7.00 or $8.00 an hour, it basically works out to less than my UI check.

UI has drawbacks.  It’s usually way below what you were making before, and if you get a job, even a crappy, underpaid one, it stops.  As long as I’m getting it, I think the best thing I can do is concentrate on finding full-time work that will allow me to pay bills and get caught up again.

I’ve sold possessions here and there.  Nothing worth much, unfortunately.  But a pot rack netted some dough, and I may do the tag sale thing again.  I keep that part of my garage clean and ready so all I have to do is price and place merchandise.  Tag sales are a lot of work for little money, but you’d be surprised what people will buy.  I have a lot of craft stuff I’m not using.

Which, of course, I could be using to make crafts I could then sell at my garage sale and online.  That is definitely a possibility, as is exploring more freelance writing options.

I cut my own figure skating music, and I’ve cut some for other skaters.   This only nets me gas money, but it’s better than nothing.

Lastly, I’m lucky my parents are still able to help me out now and then.  I hate that, but sometimes you have to do it.  If I had kids, I’d probably help them too, if they needed it.

These options aren’t for everyone, of course.  Some people do odd jobs, and there are a lot of door-knockers who ask to mow my lawn or pick up my brush pile for a few bucks.  If you think outside the box, there are lots of ways to make a bit of cash here and there.  But they won’t replace a job.  And that is still the goal.

[Editor’s Note: If you enjoyed this article you can read more of Liz’s “unemployment adventures”: How I Could Have Been Prepared for a Layoff, Unemployment Adventures: Shall I Ditch This or Keep It, and Unemployment Adventures: Jobs Aren’t the Same Anymore]