Times are tough, for everyone. It’s hard to meet repayments, rent, grocery bills and have a little bit left over for a rainy day. So, when you look at your financial day-to-day, could you live off the unemployment benefit? $450 a week.
It’s certainly a help for people who have lost their jobs, but is it possible to live a well-rounded life off such a sum. And what are some tips and tricks to make the money go further?
In an American example, the unemployment benefit- while aiming to provide half of the ordinary working wage- in fact only provides about one third. Imagine it. A third of what you currently earn (and, if you’re anything like me, are likely to spend in that same week) is all you’d have to live on. $450 might seem like a lot of money at first glance, but there wouldn’t be much to fritter it away on.
Benefit schemes struggle to keep par with inflation and cost-of-living, making it a very difficult task to live off unemployment welfare while looking for a new job.
Unemployment benefits are not intended to be long-term. Ideally, they are a buffer in the transitional phase between unexpectedly losing one job and finding another. Sadly, these ideal scenarios are not reality for the long-term unemployed. Even for people who eventually find other work, the process is a long, drawn out one.
It is estimated that, in the States, people can spend 99 weeks or longer on unemployment benefits. Which means that there have to be some enormous lifestyle changes to cope with a significantly reduced income in the meantime.
An emergency fund will provide a key buffer should you unexpectedly lose your job. Ideally, you will have saved 3- 6 months worth of income, in which case you may be able to delay the time spent on benefits. Again, for a lot of people, those kind of savings are hard to come by or sustain. While they might have some savings, they’re not always enough to support a long job hunt.
If your paycheck is about to get cut to a third, you’ll need to look at downsizing at a whiplash rate. Cancel all unnecessary subscriptions, like the gym, and stop eating out. In order to return to your normal way of life, you may need to suspend it for a while.
Think through every aspect of your life and how it can be changed to accommodate your reduced income. Think about buying your food in bulk and freezing it to save money. Some people suggest doing the same with milk. Suggest to all your friends that you should have pot luck dinners, where everyone brings a plate of food, instead of expensive dinners out. Buy your bakery goods at the end of the day, when they’re significantly reduced.
In a period of unemployment, it also helps if you can supplement your income with odd jobs. While you may be looking for another long-term job in your field, get creative about what jobs you can do during the search. Mow lawns, act as an extra, write for Suite 101. Any extra money is going to be a huge help in tiding you over until you find new work.