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Layoffs After 50: You Have Options

In order to carry a positive action we must develop here a positive vision.
-Dalai Lama

From the lunchroom to the nightly news, older workers are bombarded with stories of how hard it is to get a job after 50. This can be a demoralizing refrain. It’s especially scary if you depend on an income to survive because you don’t have enough in savings.

One mistake many people make is to turn to their retirement savings as a life raft. But, if you’re 50 or older, this could be a terrible move.

3 out of 10 people who lose or change jobs cash out of their retirement accounts.1

An estimated 1.5 percent of assets “leak” out of 401ks and IRAs each year through early withdrawals, cash-outs or loans, according to a white paper from the Center for Retirement Research at Boston College.2 Without these leaks, IRA retirement wealth would be 20 percent higher.3 This is a substantial amount for people on fixed incomes.

Apart from draining your IRA or 401k during unemployment, being out of work can hurt you in other ways, too.

The Center for Retirement Research4 reported that:

➢ The average older worker who loses her job has a reduced income of 15 percent a decade later versus her older peers who averted a layoff.

➢ Not only that, but her pension is worth 20 percent less and financial assets are also reduced by 30 percent.

Let’s put all of this doom and gloom into perspective. Although, it is tougher – in some instances – for older Americans to find work, it’s not impossible. In fact, there are dozens of resources out there to help you capitalize on your experience.

Many of you might be thinking: what about age bias? Yes, age bias exists – but so do companies and hiring managers who understand the value seasoned workers bring to the table.

And with the wonderful world of technology, there is a whole new job market that many people don’t know exists. Or, if they do – they don’t know where to begin.

So, before you touch that 401k you have worked so hard to build up, roll it over into an IRA or just leave it where it is – if you need help figuring out what to do with your investment, contact us and we’ll walk you through the next steps.

Now, let’s look at 5 job options you can explore today!

  • 1. FREELANCE

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    Back To Slide Show

    Thought freelancing was just for Millennials? Think again. This is an entire world full of skilled, talented people of all ages and backgrounds who make money doing what they love – without ever having to leave their house. The world of freelancing is open to everyone from teachers and administrative assistants to engineers, voiceover actors and salespeople. There are many freelance job sites out there that will help connect you with employers. Here are a couple popular ones: upwork.com and freelancer.com

  • 2. VIRTUAL AGENT

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    Have you been on a website and a little box appears asking you if you would like to chat? The person you would be chatting with is called a “virtual agent.” They are probably wearing slippers, sipping tea and sitting in their living room. But, they will still do a great job helping you get what you need. You could be one of these people. Many reputable companies hire virtual agents as a way to up their customer service game. Needle is a fantastic resource for virtual agents. You can fill out an application right online: pincushion.Needle.com

  • 3. TUTOR

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    College graduates can make money working from home as a tutor. This goes for people over the age of 50. Tutor.com is one resource to find work making $10 per hour or more remotely. As all teachers know, college can’t prepare you for hands-on teaching – only experience can do that. So you have a huge advantage! Popular subjects include math, English, social studies and history.

    Kaplan is another reputable employer that hires experts in a variety of areas to teach online courses. Subjects include software development, data science, UX/UI, IT, test preparation, finance and accounting, business, insurance, real estate, legal, healthcare courses and more. You can apply directly on their website: Kaplan.com

  • 4. WRITING AND EDITING

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    Good writers, editors and proofreaders can make a living working right from home. There is a growing need for content these days, so the demand for quality writers is huge. If you have experience writing or editing, you already have a leg up on your younger peers – as many inexperienced writers make rookie mistakes.

    You might want to collect pieces you have written and create an online portfolio. There are many free sites out there, so you don’t have to spend a penny. It doesn’t have to be fancy either, just a place where employers can go to see your work. WordPress is an easy-to-use (and FREE!) DIY website builder. In some cases, samples aren’t required – you might just have to take a skills test. Check out Global English Editing (geediting.com) and upwork.com to get started.

  • 5. SEASONAL AND PART TIME WORK

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    If you want to get out of the house and interact with people, without having to rejoin the rat race, seasonal and part-time work might be the best option. There are so many jobs for people who are flexible in their hours and expectations. You could sign up with a temp agency and take jobs as they come or work part-time at a store, as a bookkeeper or as a museum membership agent. The sky’s the limit!

  • BOTTOM LINE

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    Don’t believe the hype! Unemployment is relatively low for people over 55, according to the Bureau of Labor Statistics.

    Recent data shows that the unemployment rate for people over 55 is just 3.2 percent; contrast that number with a whopping 16.1 percent for teenagers (16 to 19 years) – and older workers aren’t doing too bad.5

    Of course, you might face hurdles as you get older – but so do recent college grads. Everyone has their own challenges they must overcome when job hunting.

    It’s natural to feel anxiety if you’re unexpectedly let go from your job, but avoid making hasty decisions. Tapping into your retirement savings should be the last thing you do.

    TAKEAWAY. Make a list of all your skills, stay positive and before you know it, you’ll have a brand new job – and your retirement savings intact.

 

 

1http://www.cnbc.com/2015/02/25/top-reasons-for-early-retirement-account-withdrawals.html
2http://crr.bc.edu/wp-content/uploads/2015/02/wp_2015-2.pdf
3http://www.cnbc.com/2015/02/25/top-reasons-for-early-retirement-account-withdrawals.html
4http://squaredawayblog.bc.edu/squared-away/layoffs-after-50-cause-severe-losses/
5https://www.bls.gov/opub/ted/2016/unemployment-rate-3-point-2-percent-for-those-55-years-of-age-and-older.htm

Confidence Wealth & Insurance Solutions 3 Comments

If You’re Getting a Divorce, You NEED to Do This Now

Put Emotions Aside and Avoid These Four Common Traps

Jen and Steve have been married for eighteen years. They have two children, 16 and 14, a beautiful home, good jobs, vacations every year and money saved. In short, their life looked picture-perfect. Until Steve asked for a divorce. Blindsided, Jen was unable to function normally. Her emotions were turned to 100. It was as if her world had been t-boned by a semi-truck – driven by her husband. At least that’s how it felt.

Jen was stuck in a whirlpool of anger, sadness, confusion and guilt. Why? What did I do wrong? What could I have done better? What if…?

Jen and Steve are examples of the, approximately 813,000, couples who get divorced every year.1

The 4 Major Mistakes Women Make

But here’s the deal: if you’re a woman who is faced with divorce, you must avoid making these four common mistakes – for your future well-being.

  1. REACTING EMOTIONALLY

Of course you’re emotional, the most important relationship of your life is about to end. This is totally normal.

But you can control how much damage it causes by getting your head together. This is especially important during divorce proceedings.

Here is something you should think about when you’re in the thick of divorce: what do I want my life to look like in two years?

Tap into your innermost desires to paint a picture of your new life, post-divorce.

► Do you want to have financial security?

► Do you want to be able to enjoy all the same things you do now?

► Do you want your children to live in the same neighborhood or go to the same schools?

This picture of your new life is your map for navigating negotiations of finances and assets. Because if one thing is certain: men usually treat divorce like business deals. They leave their emotions outside of the lawyer’s office. And you should, too!

This means if your soon-to-be ex tries to convince you that you don’t need a lawyer, you must put your emotions aside. You should definitely get a lawyer – and one that comes with high recommendations. Also, make sure you don’t empty your bank accounts paying attorney fees.

 You might be tempted to stick it to your husband by taking him to court until he hands over his left kidney – but that may cost you and your family.

So keep cool and look at this like a chess game. You want to the most you can get without hurting yourself.

  1. NOT KNOWING WHAT YOU HAVE OR OWE

This is a biggie. Many women have no idea what they have or what they owe. Here’s a very important piece of advice: if you are thinking about filing for divorce, find out what you have before you do.

 This is why: as soon as the word divorce comes up, your husband will have a head start at hiding assets that might have gone to you and your children. Not all partners will do this, but it happens.

You can either do the detective work yourself (open those bank statements) or hire a forensic accountant to do it for you. The more you know, the better off you will be when it comes time to divide assets.

  1. SETTLING TOO SOON
You might not believe this, but many women walk away from a lot of money – millions even – out of guilt or emotional fatigue.

Let’s talk guilt first. As women, we often try to please. We don’t want to hurt anyone and we don’t want to be judged poorly. Because of this, so many women feel guilty about asking for what they are entitled to.

If they were stay-at-home moms they might feel like they don’t deserve half of the assets. And guess what?

 When they do walk away from their fair share, they often regret it later. The simple reason for this is that emotions clouded their judgment (see #1).

After the dust settles and you begin to see things clearly, it is too late to redo divorce proceedings.

So be smart. Make sure you get the maximum you are entitled to by law.

Remember, many men treat divorce like a business transaction – and you should, too.

Make your partner aware of your intentions: you want what is legally owed to you – nothing more and nothing less. If he bullies or harasses you into settling for a lesser amount, you can avoid talking to him and use a mediator instead.

  1. MISMANAGING MONEY

Once the divorce is over you are now left with your assets. For women who have relied on their spouses for financial support and guidance, this can be a very intimidating situation. This is when many women make irreversible mistakes.

First of all, you might still be emotionally vulnerable. It could take two years (or more) to get over a divorce.2 What does this mean? You could trust the wrong people to help you heal your wounds.

 Predators are very good at spotting potential victims who are often emotionally fragile, hungry for love and companionship.

Predators can come in many forms. They can be a new boyfriend. An unethical financial advisor or attorney. Someone who wants to sell you their business.

Whatever the case may be, you need to secure a financial advisor you can trust. Why is this so important? Easy. It’s important because your advisor will help you manage your assets to achieve the lifestyle you want.

You want to avoid paying tons of fees or locking money into investments that might not match your current situation.

Make sure the advisor comes with excellent recommendations and is a fiduciary.

Click here to visit out our affiliate company PLJ Advisors. And yes, they are fiduciary!

Bottom Line

Divorce is not the end of the world, ladies. You will survive it! The difference between women who handle it rationally and those who let their emotions take the wheel is enormous.

Don’t be afraid to get support from women who have been through it. Make sure you trust the right people. And, finally, don’t short change yourself!

To learn more about what to ask a prospective advisor, read this article: If You Don’t Know What a Fiduciary Is… NOW Is the Time to Find Out

 

1https://www.cdc.gov/nchs/nvss/marriage_divorce_tables.htm
2http://www.huffingtonpost.com/2013/07/30/how-to-move-on_n_3679198.html

 

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Retiring Soon? This Could Mean a Major Health Boost, According to Study

The common refrain when someone retires is: “Don’t sit down!” A friendly – albeit foreboding – warning, to the newly unemployed, about not becoming a couch potato can be a bit of a downer.  Other morsels of wisdom include: “Keep moving. Don’t sit around in your pajamas all day eating doughnuts. Find a hobby. Stay in touch with your friends.”
If you’re retired, then you have probably heard some, or all, of this advice.

In some ways, it’s scary to hear. You imagine yourself morphing into a motionless sloth who stops showering and forgets how to use a fork the moment you cash in that 401k.

The Best Is Yet To Come

Well, it turns out that retirees actually make positive health changes after they stop working, according to a recent study led by the University of Sydney.

The report, which surveyed 25,000 retirees, found that retired folks are more active, sleep better and curbed their smoking habits compared with their working counterparts.1

This is exciting news for a lot of people who believe that retirement signals the end of a meaningful, vibrant life. In fact, the contrary is true. Retirees seem to be traveling more than ever before – along with quitting smoking and not sitting on the couch eating doughnuts.

Travel More, Sit Less

U.S. travel company, Overseas Adventure Travel, which creates adventure excursions for people who are over 50, has seen an increase in older adventurers. The company reported a 67 percent spike, over the span of ten years, in 50+ travel. Here’s another fun fact: AirBnB users, over 60 years of age, total more than 1 million customers.2

This adds up to a beautiful picture of retirement. It’s what we all imagine as we clock in to work every day.

So next time you go to a retirement party – be sure you shelf those tired warnings about being a couch potato and congratulate your newly retired buddy on a fun, fulfilling future!

 

10 Tips on Getting the Most Out of Your Retirement:

  1. Plan Now! Create your retirement goals and make a plan to reach them.
  2. Don’t Wait to Save. Forgoing a latte or new pair of shoes each day or week adds up – so keep one eye on the future (while the other one is on that new purse).
  3. Take Advantage of 401ks. If your employer is matching your money, make sure you jump on that opportunity.
  4. Get Healthy Now. If you get in shape now, by the time you retire you will have the stamina and energy you need to follow your passions.
  5. Think about extra money you’re spending that you could be investing. Do you pay for a storage unit? That money adds up, while the stuff inside depreciates.
  6. Create Healthy Habits. Just like investing your money for retirement, invest in good habits now so later they will be easier to stick with. Replace cookies and chips with fruits and gorgeous salads. Make time for a walk each day or a coffee date with a friend.
  7. Stimulate Your Imagination Don’t wait for retirement to start a hobby. Start now! Even if you only have an hour a week to devote to it – whether it’s tennis or ceramics – jump in! By the time you retire, you’ll have connections and more time to spend doing the activities you already cultivated.
  8. Meet With a Financial Planner A good financial planner can help you set up investments now and adjust them as you near retirement, so that you have enough money to enjoy your life without worrying about running out.
  9. Geography As you near retirement, assess where you live. If you’re far from family and friends, you might want to consider relocating before or right after retirement. A good network of people you love, trust and enjoy being around can dramatically enrich your life.
  10. Check Up On Your Investments Finally, don’t rely on anyone else to make sure you are on the right track for retirement. There’s nothing worse than saving your whole life only to find out at age 62 that your investments were all wrong for your goals… and you lost money. Don’t let “fake science” fool you into thinking you’re earning huge profits. Look at your bottom line – and always follow your gut. If you feel like you need a second opinion, then you probably do.

 

 

 

1https://www.sciencedaily.com/releases/2016/03/160311105229.htm
2http://www.forbes.com/sites/lealane/2016/06/03/2016-research-shows-wide-range-of-retirees-preferences-in-travel/#22aead0c3bd5

 

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Surviving Financially When You’re Unemployed

What is it?

When you lose your job, you may have to put yourself on a financial diet. Just as losing weight is simple if you eat less (and exercise more), staying afloat financially is simple if you spend less. Is this process going to be easy? No, of course not. But it can be done with a little self-discipline, some creativity, and a lot of planning.

Plan for a six-month period of unemployment

It’s hard to know how long you’ll be unemployed. You may find a new job within a matter of weeks, or it may take you months. However, it’s best to plan for a worst-case scenario, probably six months. Most likely, you’ll find a job sooner, and you can throw the rest of your plan in the trash. But, if you don’t find a job quickly, at least you’ll be prepared.

Follow the plan

When you’ve come up with a financial plan, stick to it. Like any diet, you’ll be tempted to cheat by spending a little more money than you should. You may even find that as time goes by, you want to change your plan a bit. That’s OK. Your plan is designed to be flexible so that you don’t feel too burdened by something that seems unworkable.

Adjust your expectations

No, finding a new job is not going to be easy

First, despite the number of appealing job ads you see in the Sunday paper, finding a new job is not going to be easy. Even if you’re one of the lucky few that’s working in an occupation that’s in high demand, finding a new job is probably going to take at least a few weeks and maybe months. Your job search may look something like this:

  • Week One: Send out ten resumes, and wait for the phone to ring.
  • Week Two: Send out ten more resumes, and wait some more.
  • Week Three: Send out five resumes for jobs you really want and five for jobs that you really don’t want. The phone rings. It’s your mother.
  • Week Four: The phone rings. Then it rings again. You line up two job interviews. You send out three more resumes.
  • Week Five: You have two interviews, and send out five more resumes. You’re called for a second interview at one of the jobs.
  • Week Six: Good news! You’re hired! Bad news: You can’t start for two more weeks.

As you can see, even a successful job search can take a while, even if you’re a good candidate in a good job market. Prepare yourself for this by drawing up a financial plan as soon as you lose your job.

Expect that life is going to change

When you lose your job, you probably won’t be able to live the same way you lived when you had a job. If you try to live the same way, there’s a good chance you won’t survive financially. If you’re unemployed for only a few weeks, your life might not change radically. Perhaps you’ll only need to spend a little less on groceries, go out to eat once every two weeks instead of once a week, and then dip into your savings account. But if you’re unemployed for months, or if your basic living expenses are high, you’re going to have to take a more radical approach to survive. You may have to sell your house, your car, or take a temporary job. Prepare yourself mentally for this.

Map out your priorities

How desperate are you?

Desperation can trick you. Things that you once said that you’d never do, seem more and more appealing as time passes and you can’t find a new job. When you started your job search, maybe you said “I’ll do anything to survive, but I won’t sell my Jeep!” Four months late, you’re saying, “OK, maybe the Jeep has to go, but I’ll never disconnect my cable.” Hopefully, you’ll never reach the point where you say, “I’ll declare bankruptcy, but only Chapter 13, not Chapter 7!” After all, you do have some pride, don’t you? What are the things you will and won’t do, will or won’t sell to survive financially? At this point, do yourself a favor and map them out.

Remember, diets (even financial ones) don’t last forever

Keep in mind as you plan for unemployment that even though you’re on a financial diet, no diet lasts forever. At some point, you’ll find another job and the crisis will pass. Therefore, you want to be especially careful that the decisions you make now aren’t shortsighted. Do what you can to survive, but only do what you really have to.

Example(s): When Jeff was feeling especially desperate one day, he sold his lawn mower at a garage sale for $75. Two weeks later, he landed a job at a software company, and his lawn had grown six inches. Jeff was forced to spend $350 for a new mower.

Draft a survival budget

The next step is to draft a survival budget. If you currently have a budget, use that as a guide. If you don’t, you’ll have to start from scratch by listing all your income and expenses. A survival budget is a bare-bones version of a regular budget. What you want to end up with is an idea of what income you need to actually survive. Start by listing your expenses and your post-employment income. Remember to include only expenses that are necessary; eliminate any items that are luxuries or that you could reasonably do without.

Find ways to increase your income

There are many ways to increase your income while you look for a new job, some of which you should look into immediately, and others only when you are truly desperate.

Unemployment insurance

One of the first places you should look for income when you lose your job is your state’s employment office. However, you can only receive unemployment benefits if you meet certain eligibility criteria. Mainly, you must be involuntarily unemployed. This means that if you’ve quit your job, you have no chance of receiving unemployment benefits, but if you’ve been laid off or fired (but not for misconduct), you should definitely check into it. Benefits and regulations vary from state to state, so it’s hard to say how much you’ll get. But if your application is approved, you should begin receiving benefits quickly, often within a week or two.

Severance pay

You may be eligible for severance pay if you are laid off. How much you receive will depend upon your employer’s policy. You may have the option of receiving a lump-sum payment or a continuation of salary. If you take a lump-sum payment, you’ll have immediate control over your money, but you may lose your employee benefits. If you take a continuation of salary, you may keep your benefits, but you’ll have to trust the company that laid you off in the first place to stay financially sound.

Savings

If you’ve planned ahead, you may have an emergency fund set up that’s equal to three to six months of living expenses from which you can borrow when you need to supplement your income. This is a great source of income … if you have it. Many people don’t, and are surprised to see how fast a savings account can be depleted when it’s used as a source of funds for everyday expenses.

Credit insurance

You probably don’t have credit insurance that will make your bill payments when you’re unemployed. However, if you have any doubt, call your mortgage company, or credit card companies to find out or check your billing statements. Perhaps you inadvertently signed up for such protection, which adds a few dollars to your payment every month. However, you may have to wait for a while before receiving benefits.

Part-time or temporary job

If you get a little more desperate, you should think about taking a part-time or temporary job to supplement your income. This may be a good idea for two reasons. First, you’ll feel less stress if you know that you have at least some regular income coming in. Second, you may even be able to parlay a part-time or temporary job into a full-time job, or gain experience that will help you in your job search. Third, you’ll be able to schedule interviews relatively easily, if you can decide where or when you want to work (as you can with many temporary assignments). Even if you take a job that you feel doesn’t have career potential, you’ll feel better just doing something besides sitting around the house worrying.

Have a yard sale

Depending upon what you have to sell, having a yard sale can be quite lucrative. If you look around your house, you’ll be surprised at how much you own that you really don’t need. Make a list of things you want to get rid of, and list them in order of priority. If you’re really desperate or if you don’t care about an item, price it accordingly. If you don’t want to sell it unless you get a good price, keep that in mind as well. Also consider consigning items at a shop if you have specific things to sell.

Sell your house, or rent it

As a last-ditch attempt to remain solvent, selling your house can be advantageous if you can raise a lot of cash this way and if you want to reduce your monthly cash outlay over the long-term. It’s not a good short-term way to raise cash because it will take time to implement, and it has long-term consequences. After you accept an offer on your house, you could have trouble if you change your mind, and the impact on your family will be far-reaching. If you want to temporarily reduce what you pay for housing, however, you may want to consider moving to an apartment (or cheaper housing) and renting out your home for a year or two.

However, any decisions you make in this area should be made carefully, and only after considering the true cost of your decision and how much you can actually get out of the deal.

Withdraw money from your tax-deferred retirement account

Withdrawing money from your tax-deferred retirement account (e.g., an IRA or employer-sponsored retirement plan) is an option you should consider only as a last resort to avoid bankruptcy. In general, any money you withdraw from a tax-deferred retirement account will be taxed as ordinary income for the year in which you make the withdrawal. In addition, you may have to pay a 10 percent penalty tax for early withdrawal if you’re under age 591/2. The IRS allows exceptions to the penalty tax under certain conditions, however.

Tip: If you are considering taking funds from your IRA or retirement plan, you should consult a tax advisor regarding the specific tax treatment of your withdrawal, because not all of it will necessarily be taxable. For example, if you have ever made nondeductible contributions to your traditional IRA or after-tax contributions to your employer’s plan, a portion of your withdrawal may not be subject to tax. Also, qualifying withdrawals from a Roth IRA are totally tax free, and even nonqualifying withdrawals may not be fully taxable (since Roth IRAs are funded only with after-tax contributions).

Borrow from the cash value of your life insurance policy

If you have a life insurance policy with cash value, consider borrowing the cash reserves. You’ll have to repay the money, but not right away.

Borrow from relatives

Borrowing from relatives can be difficult. Not only will you have to put aside your pride, but you’ll also have to contend with the consequences. Your relatives may be generous, but there’s a chance that their generosity will backfire. What if you can’t pay the money back? What if you eat out one night? Will they secretly (or vocally) hold this against you? If you do borrow from a relative, clearly outline the terms of the loan in writing, if necessary. That way, you’ll reduce the chance for a future conflict.

Reduce expenses

Increase deductibles on auto insurance

Check with your insurance company to find out how much you could save per month on your auto insurance premium if you increased your deductible. However, remember that if you get into an accident, you’ll have to pay the deductible out of pocket. Will you be able to come up with a large amount of cash while you’re unemployed? Balance the risk with the benefits.

Sell your car

While many people consider a car to be a necessity, you may be able to dramatically reduce your monthly expenses by selling yours–they are expensive to drive and maintain. Not only do you have to pay for gas and upkeep, but in many cases, you also have to pay insurance premiums and monthly car payments. This can add up to several hundred dollars per month–money you could really use when you’re unemployed. Keep in mind, however, that if you have a loan on your car, you might owe more than your car is worth; if you sell your car for less than the loan balance, you’ll still have to make payments until the balance is paid off (or take out another loan to pay off the car loan balance). Also, if you get another job, you may need to buy another car, and many lenders require a certain length of employment before they give you a loan. Investigate your options thoroughly before you sell your car.

Selling your car may also be a good way to raise a large amount of cash quickly. This will depend, of course, on whether you own your car, whether you have a loan for it, and what your car is worth. Again, this is a decision to make carefully. If you have a loan, call your bank to find out the procedure to follow, because until your bank releases the title, you don’t really own the car. They can also tell you the book value of your car and your loan balance. If you own your car outright, research its value at the library or on the Internet, and decide what price to charge.

Negotiate with your creditors

If you find that you’re having trouble paying all your bills, seriously consider negotiating with your creditors. Assuming that you have good credit, you may find it relatively easy to reduce the interest rates on your credit cards, skip a payment or two on your car loan, or reduce your monthly payments temporarily. To do this, you’ll have to put aside your pride and admit that you’re having financial difficulties. You’ll be in a much better negotiating position, however, if you call your creditors before you get into financial trouble. Some creditors will turn you down, but most will negotiate with you. If you wait until you’ve already missed more than one payment and the creditors are calling you, you’ll have more trouble making your case. If you need help negotiating with your creditors or managing your debt, you may want to call a nonprofit credit counseling organization, such as the Consumer Credit Counseling Service (CCCS). For further information on CCCS, call (800) 388-CCCS.

Caution: If your creditor agrees to let you skip payments or pay reduced amounts, honor the terms of your agreement, and keep in close contact with your creditor’s representative. Otherwise, your good credit may be ruined.

Discontinue discretionary expenses

You probably pay for a lot of things you don’t really need. For instance, think about canceling magazine subscriptions, extra phone services, credit cards you don’t use that have an annual fee, health club memberships (if possible without incurring a large cancellation fee), auto club memberships, cable television, and Internet service (although this can help you find a job). You may even save a few dollars a month by switching banks if you currently pay monthly checking fees. Every little bit helps.

Tip: If you’re billed annually for some of these things, you won’t save any money unless you cancel them at renewal because you won’t ordinarily get a refund.

Limit long-distance calls

If your long-distance bills are high, put yourself on a phone budget. Vow to spend no more than a certain amount (say $25 a month) on long-distance. To keep track of your calls, keep a notebook next to your phone so that you can easily see when you’ve reached your limit.

Strategies to consider if you have more time to prepare

Often you lose your job with little warning. However, if you’re being laid off or plan to quit your job, you may have time to save money for unemployment by using the following strategies.

Establish a home equity line of credit

If you have enough time, consider establishing a home equity line of credit, if you have enough equity in your house (20 percent is often the minimum), and if you can find a bank that will loan you money without charging you closing costs. With a home equity line of credit, you’ll pay interest only on the portion you use. However, the bank may charge you an annual fee or require that you take a certain draw on the line up front. You may even be able to use the line to pay off credit cards or loans that carry a higher interest rate, and consolidate your debt. You’ll still have to make a monthly payment, however, so make sure you’ll be able to afford it before you put your house on the line. In addition, beware when lenders claim that your home equity line of credit will be tax deductible. Although this may be true in many cases, you should consult your tax advisor to find out whether it will be true in your case.

Caution: Use caution when using your house as a debt management tool. If you can’t pay your loan back, you may lose your house.

Reduce contributions to retirement or education funds

Once you know you are going to lose your job, stop contributing to any savings plans that you’ll have trouble accessing, or that aren’t necessary. These include retirement funds, education funds, and Christmas club accounts.

Decrease your withholding

Consider increasing your withholding allowances to reduce the amount that is taken out of your paycheck. Deposit this extra money in a savings account. Of course, be careful that you don’t claim more allowances than you are entitled to. When you get a new job, you should look at your tax liability for the year. It’s possible at that time that you’ll have to increase your withholding to make up the difference.

Plan a financial strategy

Once you’ve mapped out your priorities and drafted a bare-bones budget, you’re ready to come up with your own six-month financial strategy. After you’ve formulated your own strategy, post it somewhere (maybe on the refrigerator) where you can use it everyday to chart your progress.

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Setting Up a Support Network When You’re Unemployed

What is an unemployment support network?

An unemployment support network is a group of people, organizations, or resources available to help you cope with issues that unemployed people must face. Setting up a support network when you’re unemployed is important for several reasons. First, when you lose your job, your ego is likely to be damaged, and you’ll benefit from the encouragement and perspective that talking to others can bring. Second, if you plan on returning to work, you may need help finding a new job or exploring a career change. Third, if you’re an older unemployed worker thinking about retiring rather than seeking another job, you may need the advice of others who have experienced retirement firsthand. Whatever your reason for needing support, you can easily find it if you know where to look.

Emotional support

When you lose your job, you’ll most likely turn to your friends and family for emotional support. Another option is to find or form a support group (also called a self-help group) to share information and provide emotional support to one another.

Finding a support group

If you live in a metropolitan area, finding a local support group should be easy. Look in the Local or Community sections of your newspaper or contact your local community center, college, or university to see if it sponsors support groups. You can also try the American Self-Help Group Clearinghouse website www.mentalhelp.net for information on starting or finding a self-help group in your area.

Job-hunting services and assistance

Rather than go it alone, you may choose to find a job using an employment professional or a government agency or community organization. Some employment professionals will charge you a fee for their services, while others do not. Government job services are free but may offer only basic assistance. Community organizations may sponsor free or low-cost services, which are sometimes tailored to the needs of specific groups.

For-fee services

If you are having trouble marketing yourself, you might consider paying someone to help you. You can, for instance, hire image counselors to teach you how to dress professionally, rewrite your resume, target your job search, and rehearse interviewing. Or, in a tight job market, you might use a for-fee job placement agency. You sign a contract with the agency, under which you promise to pay a flat fee or a certain percentage of your first year’s salary and in turn, the agency promises to find you a suitable job. Whatever your reason for paying someone to help you find a job, be careful. Before you sign a contract, know what you’ll get for your money. How hard will the company work for you? What kind of guarantee does it offer? What specific services does it offer? In particular, check the company’s reputation. Make sure that it has been in business in the same location for several years, and call the Better Business Bureau (if the agency is a member) and ask for references or published statistics on its placement success rates.

Fee-paid services

  • Headhunters and recruiters: If you work in a high-demand occupation or you are a professional with a few years of experience, you may be able to find a job through a recruiter or a headhunter. In fact, one may come looking for you! Headhunters or recruitment professionals are usually paid by companies who use them to find qualified employees. Most headhunters specialize in finding employees in a particular field, and they expect you to be flexible. They may not want to talk to you, for example, unless you are willing to relocate. They also may not be interested in you if you are changing career paths or if you don’t match their area of specialization and requirements.

Caution: A recruiter can seem like your best friend when you are unemployed. Remember, however, that the recruiter is also a salesperson, and you are the product. Don’t be upset by a recruiter’s reluctance to talk to you unless you are a seasoned professional, and don’t be misled into thinking that a job offered through a recruiter is necessarily the best job for you or the only good way to find a job.

  • The temporary or permanent placement agency: Another type of fee-paid employment service is the temporary or permanent placement agency. You sign up with an agency and specify the type of position you are looking for, and it tries to match you with a job opening. You’ll work for the agency, not for the company unless the company buys your contract from the agency. This means that you won’t be eligible for any company benefits or perks. Some agencies specialize in placing candidates in a certain industry (banking, for instance) while others are generalists. A good employment service will be responsive to your needs, offer training and benefits (if necessary), and won’t mislead you about the jobs they usually have available. Some companies publish “teaser” jobs in the paper that probably won’t be available when you call the agency because they are designed to lure you in to fill out an application.

Caution: Although taking a temporary job is a good way of supporting yourself for a short time or even finding a permanent job with a good company, you’ll probably find that the pay is relatively low. However, you may be able to negotiate a better rate of pay if you are a good, qualified candidate.

Government agencies and community services

Your local employment office (where you apply for unemployment insurance benefits) may assist you in finding a new job, or there may be programs set up in your community to help displaced workers, low-income workers, senior workers, or veterans. Check your telephone directory under Job Services, Employment Services, or Social Services. Your local college or university may also sponsor career-counseling seminars or courses that are open to the public even if attendees are not enrolled in a degree program.

Outplacement assistance

If you have prior warning that you will be losing your job, you can do several things to make unemployment easier. First, if you’re being laid off, find out if your company has outplacement assistance. You may be able to attend seminars or speak with a job counselor one on one. Next, if you plan on looking for another job, ask about your current company’s policy regarding employment verification and references. If a potential employer calls and asks about your work history, what information will the company give out? In addition, are your coworkers or supervisors allowed to give professional and/or personal references? If you’re leaving the company because you’re moving or being laid off, don’t forget to ask everyone you know who might have leads on job openings for introductions to managers or executives at other companies.

Other job-hunting resources

The Internet

Many Internet sites are devoted to the needs and concerns of the job-hunter. These sites offer career counseling, networking opportunities, job fairs, and lists of available jobs (including on-line applications). Some popular sites are Monster (www.monster.com), Headhunter.net (www.headhunter.net), and the Career Resource Center (www.careers.org). When you’ve lined up a job interview, you can prepare for the interview by researching the company on-line under the company name. You may be able to pull up press releases, articles about the company, or even financial information. You may have to pay an extra fee for the latter. Information about public companies is readily available, while information about private companies can be difficult to find.

Libraries and bookstores

If you go to the library or a bookstore, you’ll find many books on job hunting and career counseling. These books can be quite useful, particularly if you’ve been out of the job market for a while or you need help in a particular area. You can also buy or read local and out-of-town newspapers that advertise jobs.

Friends, family, and acquaintances

One good way to find a new job is to tell everyone you know that you’re looking for one. Your friends, family, and acquaintances may know about jobs that are presently open within their companies or about job opportunities that might be available in the future. They may also be able to put a good word in for you with a manager or the human resources department. Some companies use a very formal process to hire (first open the job to current employees, next advertise the job to others), while others hire more informally.

Special considerations for retirees

There are many resources tailored to your needs if you are an unemployed older worker looking forward to a relaxing retirement, searching for volunteer opportunities, thinking about working part-time, interested in opening your own business, or facing health concerns. You can find support groups in your community or on the Internet to help you adjust to retirement. There are also a multitude of organizations set up just to help you find the resources and information you need.

 

 

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