by Cherrine Banks

Created on: September 06, 2008   Last Updated: November 02, 2010

Managing your finances when you are between jobs is tough. You have to consider the overall economy, the reason for your unemployment, your skill set, and estimated length of unemployment. The economy is a determining factor since you may apply for unemployment benefits via your state. The estimated time frame is 24 weeks with the possibility of extension for an additional 24 weeks but if the economy has a high unemployement the probability for an extension is limited.

The reason for your unemployment is important. For example, if your company was part of a well-known, massive layoff/merger/acquisition you may have received a generous severance package. You would be able to maintain fixed expenses such as rent/mortgage, property taxes, and homeowner's insurance using your severance while keeping your unemployment separate for postponed/variable expenses such as dining out, entertainment, and travel.

On the other hand, it is rare to obtain a generous package so your unemployment may be your only income for both fixed and variable expenses. Remember, it will run out. While searching for a new job, check with an unemployment expert to see if you can go back to school for a short-term certificate in a promising field such as computers, technology, education, and medicine. Also, check with your state to determine if you can start a homebased business for minimal costs instead of seaching for a traditional job.

Your skill set is critical. For instance, if you are a registered nurse who lost her job because of a merger you will obtain a job offer sooner because of the national shortage of good nurses and you may receive better pay/benefits/work-life options. You may still choose to enjoy an expensive two week vacation. However, a low-skilled clerical worker who has enormous competition needs to forego a vacation and hit the books.

The estimated time for your unemployment can vary. It's a good idea to 1) cancel premium cable channels, 2) minimize long distance telephone bills, 3) postpone getaways/vacations, 4)stop paying for group bar sessions, 5) stop volunteering for 10 groups (you need the time to earn money), 6) purchase discounted clothes, furniture, and electronics, 7) sell some qulaity items via ebay, 7) cut coupons for groceries, 8) reduce electricity/gas bills, 9) postpone car purchase, and 10) review the family budget weekly.

Managing your finances will be a challenge so I hope these tips help.

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