It’s been an interesting week. My wife (a Landscape Architect), and a number of her co-workers, experienced day one of unemployment. I had never encountered this situation before, but the ‘what-ifs’ always crossed my mind beforehand.
At the very least, this has been an eye opener for us, we’ve learned a lot about ourselves, and hopefully some of the lessons learned can benefit this site’s readership now and down the road. Even though we’re a mere week into this, here are some quick lessons that we’ve learned.
Unemployment Lesson #1: Trying to Get Out of Unemployment is a Full-Time Job
Since being laid off, my wife has done a number of things to get back on her feet that can be applicable to anyone. These activities can consume a lot of time and energy:
- filed for unemployment and calculated how much salary it would replenish
- said goodbyes to co-workers and gave them her contact information
- had a conversation with her former superiors and a ‘going away’ party of sorts with a large group of former co-workers
- recovered all files that could be used in a portfolio
- updated resume
- updated portfolio (this one took more than one day)
- looked for new job opportunities
- wrote a cover letter and sent resume to a potential employer looking to hire
- through networking has discovered a few possible contracting opportunities
- developed a LinkedIn profile and made 20 connections
Unemployment Lesson #2: Unemployment Benefits are not as much as you may Think
Unemployment benefits are capped at a certain amount. I’m not sure if this varies by state, but the cap amount is $362 per week in the State of Michigan. Unfortunately, this is less than a third of her former salary and doesn’t do much for us in terms of covering our mortgage and other expenses.
Don’t get me wrong, I’m thankful for anything that we can get, it’s just that the cap is fairly low and it definitely hurts those who had a relatively higher salary beforehand. It’s not as strong of a crutch as I thought it was going to be.
Unemployment Lesson #3: Do not Own a House Unless you have the Savings to Cover Income Loss
Fortunately, we have enough savings to get us through this phase. I’m very thankful for this, and if we did not have the savings, we would probably be very worried about the real potential to lose our house. We will have to cut into savings though, which is very frustrating, but at least we don’t have to live with the stress every minute of the day that comes with not knowing how we’re going to make our next house payment.
Unemployment Lesson #4: If you can Contribute to your 401k now, do it
I’m cutting my 401k contributions from the IRS maximum, all the way down to zero until she finds her next job. This was and incredibly sobering action to take. If you have the opportunity to contribute to your 401k, do it while you can. You never know when these types of situations may arise – taking away your ability to contribute. It’s one of those things you take for granted until it’s gone.
Unemployment Lesson #5: Network, Network, Network
It’s never too early to network, even if you feel like your job is 100% secure. If you’re only starting to network when you’re out of a job, you’re behind the pack. Twenty LinkedIn connections in a week is not bad, but how many networking opportunities has she missed by waiting until now to start a profile? Of course, networking in a non-virtual world is even more important. She’d be the first to admit that not networking outside of her co-workers was a mistake.
Unemployment Lesson #6: Tough Times can Bring out the Best in you
I’ve always imagined a chaotic scenario in the event of one of us losing our income. This experience has shown me that I can be much more calm and optimistic than I thought possible. We’re both seeing this as an opportunity for her to expand and grow her career versus blaming the world and feeling sorry for ourselves.
One yet to be tested quality that we will both need to make big strides in is patience. Hopefully, we won’t have to exercise too much patience (i.e. she’ll find a job quickly), but in this economy that is unlikely.
Unemployment Lesson #7: No matter how Frugal you are, there’s Always Room for more Savings
I’ve cut $65 off our monthly bill in telecom spending without losing any service that I’ll greatly miss. These savings are broken down into:
- cable: doing an inventory of the channels we watch and enjoy, we were able to cut our bill by downgrading by about $20/month and only lose one channel that we really watched.
- internet: I downgraded to a slower version of broadband. Sure, videos won’t load as quickly, but 98% of what I do online is just as efficient as it was before. Total savings here – $30/month.
- cell phone: we dramatically cut our bill by switching from a standard to a prepaid play. Total savings: $50/month
We also did an audit of how much we were spending on grocery items and made a list of about 10 expensive food items that we don’t need, which could easily take about $150 off our monthly bill (and no, we haven’t resorted to seeking Spam handouts). Call me crazy, but this budget process was actually very satisfying to go through.
This post really shows the importance of remaining calm and having a balanced perspective in these types of situations. Too many people get illogical and desperate and others just get lazy and wait for a job to come to them. That never happens.
What a practical and informative post that I’m sure that others will enjoy. I’m going to hold on to this and link to it in a posting on my blog. Very interesting
Oh man, I’m sorry about your wife. I’ve had friends laid off and the potential exists for me to lose my job at some point too. But having someone talk about the details of being laid off is sobering. Keep us up to date on how this goes…
Sorry to see that more people have been laid off. I have been unemployed for about three months. It has been hard. I, too, have been trying to cut corners. Although I envy you. In florida, Unemployment compensation is only $272 a week which makes Michigan more attractive. And I am glad I get along so well with my family. It makes it easier and harder sometimes to settle down and get work done: finding that new job. I like the organized way you have been going about it. Good luck to you and your wife. Tim
Networking is key more than anything these days. People generally want to help out when they can, and especially online, you can build relationships enough to the point where you may learn of an opportunity to send a resume to. Use all resources available, and expect it to take time.
Hi, a couple of observations – if the layoff was purely because of the economy, then she should make sure she connects *and* gets references from everyone at her company who has a LinkedIn profile. Also, joining groups is the best way to make use of LinkedIn.
Also, keep an eye on the cell phone usage. If you don’t have a landline, then her usage may jump up from the 400 minutes you were using since she will be making a lot of calls during the day.
This is a great plan!
@Georgie – both great tips. Yes, it was purely economy, and the ‘recommendations’ on LinkedIn have started rolling in. It’s funny you should mention the cell phone usage, b/c right after I made the switch I started thinking about all of the calls she might be making/receiving and thought that maybe I should have held off for a month. Oh well. We’ll adapt. =)
I have been trying everything I can to keep my spending in check! One way that I have seen BIG savings is by calling 1-800-FREE411 instead of regular 411 and in last month’s bill alone I saved $20. Just an easy way to save!
@Casey – In my experience, 1-800-GOOG411 is more efficient with no ads, and also free.
Also, to cut down on cellphone usage, if your wife is going to be making toll free calls, I have had success using Skype (which is free). Calls to landlines cost money, but toll-free numbers are absolutely free and calling from Skype has helped me cut down on my cell phone usage (especially if I know I am going to be on hold for a while).
Volunteer what free time you have, this story tolls the benefits of such work.
I can relate to Lesson #5. Networking is crucial to landing a new job. It is tough out there. No question about it. I recently heard about a new finance related job site called OneWire (OneWire.com) that matches up candidates with firms that are actually actively hiring.
Great stuff… I am living these as I’m on the job search too.
I might move up networking but the spirit of your messaing is spot on
You forgot the most important lesson of unemployment: HAVE FUN!
I understand the meaning of cutting everything out of your entertainment and now even food. I am a mom of four girls and my unemployment ran out this past Saturday. my fiancé also was. laid off for 1 1/2 years. he went back to work in sept 2011. I have been looking for jobs and no luck, I just applied for day care assistance for my youngest and it is taking forever. if it wasn’t for me renting from my brother in law,my family and I would be homeless. we are 5 months behind on rent and I need to find a job ASAP otherwise we will get kicked out! sorry for the feel sorry for myself response . I’m just losing hope!!