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: After doing a monthly minute audit, I noticed we were only using about 400 minutes per month. We had a 700 minute plan, and I didn’t think there was a lesser family plan available. The rep told me that they had a 550 minute plan (not advertised on the site) for about $15 per month less.
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.