by Michelle Wilkinson

Created on: May 16, 2010   Last Updated: March 22, 2011

Losing your job is tough, since it is a real blow to your self-esteem, but not only do you have to contend with the emotional issues that unemployment brings up; you also have to find a way to deal with the practicalities of not having as much money to spend. Whether you are forced to live on your savings or are receiving unemployment benefits you clearly won’t be able to lead exactly the same lifestyle you were leading before losing your job.

When you’re receiving a regular income it’s easy to lose track of precisely what you’re spending your money on, but this is not an option when you don’t have very much cash to go around. Ideally, you should formulate a list of all the expenditures you face so that you can see which expenses are unavoidable; which are unnecessary; and which can be replaced with cheaper alternatives. Having a list to consult makes the whole process easier than going by guesswork.

If you’re relying on your savings to survive you obviously have to allot yourself an allowance to stick within, while if you’re relying on state benefits the amount you have to spend will already be determined for you. Obviously, you can’t get out of paying for your mortgage or rent, but you will no doubt find that there are savings to be had in other areas of your life.

Perhaps you’ve never before thought about changing your electricity and gas suppliers or the company that you purchase your internet, television and telephone services from, but you could find you save a substantial amount of money by doing so. You may not be able to get out of paying these kinds of bills, but if you’re prepared to ring around and ask for quotes you generally find that, in these competitive times, companies are desperate for your custom and so will try to outdo each other in offering you the best deal.

While you can’t avoid these bills you can avoid spending a fortune on food, clothing and entertainment. Being unemployed shouldn’t mean you have to give up all the things you enjoy, but you may have to choose cheaper alternatives and go out less. You can still go out with friends to enjoy yourself, but you may want to do this once a month, rather than once a week and opt for cheaper food and drinks.

Being unemployed can be stressful, as you have to contend with looking for work while also reducing your spending just so you can keep going. However, if you spend some time organising your finances you will be better prepared to cope with living on a low income.

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