How to stay out of debt during a job loss

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I can tell you one major thing about going through a job loss. It can beat you down financially and emotionally. When my husband started a shiny new graduate program with research funding, we had no idea that his funding would later be pulled, leaving us without a full-time income. We also had no idea that an engineer with a degree could experience that kind of financial hardship. We had a brand-new baby, and he was still working on his graduate degree full-time (just without funding). We assumed that getting a job would be easy. 700+ job applications and a year later and he finally found a job that he loves. When he got the call that he had a job, it was like coming up for air. Thankfully, we were able to stay out of debt during his job loss. If you are going through a job loss, you can too. Here’s how.

A job loss can happen to anyone

Let me tell you this…a job loss can happen to anyone. My husband wasn’t a bad employee. He wasn’t lazy or terrible at his job. Sometimes things happen that are beyond your control. What you do now during the financial gap is the thing that you can control. Make a commitment to dial down your finances so you won’t carry the effects of your job loss with you after you find a new job.

Put in those applications!

Applying for jobs is rough. I get it. But the only way you’ll get a job is if you keep applying. About halfway through Ryan’s job loss, we were discouraged and worried. We wanted to quite trying. But if we had quit, he never would have found a job. You only lose if you quit. Set goals. See how many job applications you can submit a week. Network with those you know in your job area. Be open to opportunities that might not look exactly what you wanted. Rework your resume. Volunteer for free or low-paying internships that could lead to something that pays well.

job loss

Money saving tips to make it through a job loss

Trimming the fat in your budget is the best way to save money during a job loss. If you don’t have a job, you’ve got to really cut back on everything you are spending.

Re-evaluate your car situation

When my husband lost his job, we only had one car. In fact, we had been planning on buying a second car for me to drive around with our newborn right before our financial situation changed. I believe that only having one car saved us quite a bit of money. I walked everywhere with my baby in his stroller. We went grocery shopping and piled groceries into the bottom of the stroller. I walked to the bank. We made the trek to church in that stroller. It got a lot of good use. Only having one car saved us money on insurance and filling up the gas tank. Do you have an unnecessary car you could sell? Maybe you have a car with car payments you could downgrade. I’m not saying you should get rid of all your vehicles. But cut the non-essentials for a while.

Stop buying things

I’m going to admit something kind of gross. But about six months after my husband’s job loss, our vacuum broke. We lived in a house with mostly hard surface floors, but we did have some carpet and rugs. We didn’t buy a new vacuum to replace our broken vacuum. For six months. I swept and shook rugs. But money was so tight that we just couldn’t justify buying a new vacuum. Not when our baby needed to eat. It was a non-essential in that moment. If you don’t have an income coming in, you must stop buying things. Your rugs will survive without a vacuum for a few months. I promise. Eventually, you’ll get another job and you will be able to afford to buy things again. Just not right now.

Side hustles

We had a newborn baby when my husband lost his job. I wasn’t working a full-time job. But I was working a couple of side jobs. At the time, I was teaching online classes. I also picked up some freelance writing work to help bring in some extra income. Those side hustles helped us survive the year. In addition, my husband was able to get a two-month internship that payed him for his time. It wasn’t a full-time job, but it helped to get us through a few more months.

Odd jobs

Do you want to know what it’s like to dig trenches in Idaho in the middle of the winter? It’s not great. In fact, it’s a little miserable. But a friend offered my husband the work and he couldn’t refuse a couple hundred dollars. Odd jobs can mean extra money for groceries or not. Take them when they pop up. Let family and friends know that you are willing to take on extra paid work. You might be surprised what people will have you do.

Grow a garden

This is a seasonal tip, but if it’s summertime and you’re out of a job, plant a garden. Seeds don’t have to cost a lot. I think we picked up seeds for pumpkins, tomatoes, beans, peas, and corn for less than $10. That $10 was well spent. Our garden supplemented our fresh produce all summer long. All we had to do was keep the weeds away and water it.

Homemade gifts

Holidays and birthdays come, regardless of whether you have a job or not. Celebrating holidays is part of what makes our lives meaningful. When Christmas or a birthday comes around, think about how you can make a meaningful gift without spending a lot of money. Our family loves making gifts. Often, a homemade gift only costs a few dollars and a lot of your time. Spend the time and save your money.

Thrift store

The thrift store can be a treasure trove for the unemployed. Visiting your local thrift store can be a great way to pick up necessities for cheap. The Christmas after Ryan’s job loss was a lean one. We had a one-year-old and not a lot of money. I remember searching through shelves of toys and puzzles at the thrift store to find a Christmas gift for our toddler. Thankfully, the thrift store had what we needed, and we had a few puzzles and toys for him to open on Christmas.

Freebies and hand-me-downs

I can’t tell you the number of people who were looking out for us during our job loss. Friends randomly dropped off toys, clothes, and books that they didn’t need. We accepted those kind gifts with gratitude. Our youngest child is just growing out of the last of those generous hand-me-downs we received when our oldest was a baby. If someone offers you something that you can use, say yes! Be gracious and grateful. Someday you’ll be able to pay it forward.

Envelope system

One of the easiest ways that I’ve found to control your spending is to use cash. This is never truer than when you are living off from a small reserve of funds. Every week, I’d load my baby into his stroller and walk to the bank. We would pull out just enough cash for groceries and transportation costs. We kept those funds in an envelope. When we were in the grocery store, we had to carefully track the money we had, because there is no overspending with cash.

Save everything

It’s tempting to loosen up a little if you get a windfall during your period of unemployment. My husband landed an amazing internship that paid about $7000 over a period of two months. It would have been easy to blow that money on things that we needed (like a new vacuum). But because neither of us had a full-time job, we decided to save what we could from that internship. We ended up saving every penny and living off from the money I made teaching and freelance writing on the side. It was a good thing we saved that money too, because we went six more months before Ryan found a full-time job.

Eat out of the pantry and freezer

My mother is the queen of storing food. She shops case-lot sales and saves the extras for a rainy day. I’m not as good at that as my mother. But we typically have between three and six months of canned and frozen foods. Which was a nice boost to our finances while we were unemployed. Even if you don’t have a huge store of foods laying around, you probably have some of your not-favorite food items at the back of your pantry and freezer. Take stock of your pantry and freezer. Come up with meal ideas based on what you already have. Not only will you use up the things you already have, but you’ll save money at the grocery store.

Need to save money on groceries? Read: Save money on groceries with one simple change.

Sell stuff

Most of us have stuff that we don’t use around the house. Walk around your home and see if there is anything you can sell. You could also use your talents to create things to sell. I opened an Etsy shop for a time and sewed pillowcases to sell. We never sold millions, but we did sell enough to justify the time and effort that it took. Plus, it was something I could do with a toddler around.

Accept help

As hard as it is to accept, sometimes you need help. About nine months into our job loss journey, my mother-in-law sent us money to pay our mortgage. It was hard to accept that help. But it was help offered in love. I realize that not everyone will have this option, but if someone willingly offers help that you need, accept it.

Have faith

There is no question in my mind that we had divine help during my husband’s job loss. Every time I was worried about us having enough money to pay for our mortgage, groceries, or power bill, something would work out. Someone would have an odd job, we’d sell something, or a friend would drop by exactly what we needed. As we prayed and worked, God provided for our family. He will help you during your job loss too. All you need to do is ask for His help and be willing to do the work that comes your way. Have faith!

Going through a job loss is difficult. It’s scary and you’ll keep yourself awake at night worrying about how you’ll pay your next mortgage bill. But you can do it! Keep working and trying. You’ve got this!

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