My husband was just downsized out of his job. I have a well paying job but it does not cover our costs. Daycare is our biggest expense right now, but even if he chose to stay home my income would not be enough. He will be receiving 6 months severance pay. We do not have any savings to speak of but have money available on a line of credit and do not owe on credit cards. We own our own home. I want to plan around the scenario that he may be out of work for a year. He is more optimistic. What strategies would you suggest? I don’t know where to start. Several industries have shut down here so many people are struggling. Thanks for your time.

Job loss comes with two big stressors. First, there is the financial stuff that you need to figure out. Second, there is the emotional misery that you must wade through. Either piles of poop can sink you so above all else it is very, very important that you keep a cool head.

When you lose your job, apply for Employment Insurance benefits right away. Since it can take several weeks before you see a penny, the faster you do this, the less amount of time you’ll be  scrambling for cash. If you have received a severance, this will affect when you EI benefits will start coming. A delay in the start of the claim will result in an extension at the other end of the same number of weeks and your EI claim can be extended by up to one year. However if you receive a severance payout of two years or more, you won’t be entitled to EI. Severance or separation pay is paid out in a number of different forms and each is handled differently by the EI system. You need to speak to your HR department to get the lowdown on how you’ll be affected.

Speaking of what you may get from your employer, check how long your benefits will stay in place and if you’ve got any vacation/sick pay coming. And if you’re entitled to reimbursement for expenses, file an expense report right away. While your employer is feeling rotten at having to let you go, ask for a glowing letter of recommendation.

Now it’s time to sit down with your fam to discuss what’s going to be different. This should include your immediate family AND extended family. No point in pretending everything is A-OK. Brave and strong you might be, but accepting help when you need it the most from people who love you the most is exactly what family is supposed to be about.

Yes, you should tell the kids. You’ll have to tailor your communication to your children based on their ages. But they’ll overhear the adults talking, they’ll feel the stress and they’ll internalize it if you don’t address it directly. So tell ‘em. Just reassure them that while some things are going to have to change, you are going to do whatever it takes to make sure the family is safe.

Since you’ve been counting on the income just lost to make ends meet, you’ll need to look for ways to reduce your expenses so that you can live within your means until you find another job. This may mean making several budgets. The first may include your severance. Once that ends and you’re relying solely on EI, you’ll need a second budget. If you find work quickly – maybe not the bestest job, but one that keeps food flowing – then you may need yet another budget. 

Find as many places as you can to trim back. Cut your clothing budget completely, except for kid essentials. Ditto your entertainment, gifts, and all other non-essential expenses. Trim back on food. Trim way back on communication (telephone, cell, internet, and cable or satellite). 

Remember, a budget isn’t something you make and then try to squeeze yourself into. Nope, a budget is your plan for how you’re going to use the money you have. Now that you have less, you must get creative. Is daycare still an option with one partner out of work, or will you swing-shift to take care of the kids at home while upgrading skills and job-hunting? Or will you both take on part-time work to keep the kids in daycare so you don’t lose your spaces?

At this point, I bet you’re really glad you started that emergency fund. No emergency fund? Ooops. Are there things you can sell to make one? The motorcycle? The ATV? The second car? Well, your severance can pick up the slack. No severance? Ouch. I guess you’ll just have to get your butt out there and find a job, two jobs, three jobs… whatever it takes… to keep it all together. And, NO, a line of credit is NOT a good emergency fund, no matter what you’ve been told. If you think coping with unemployment is hard, try doing it while making debt repayments.  Sure, sure, you’ll eventually get another job. But if you’ve dug yourself a hellovahole in the meantime, you’ll be waaay sorry. So it doesn’t matter what you have to do to keep a roof over your head, that’s a better alternative to using a line of credit.

The same goes for using your credit cards to fill the gap in your cash flow. Don’t do it. In fact, you should take your credit and debit cards out of your wallet and hide ‘em, freeze ‘em, bury ‘em so that you don’t have the wherewithal to buy things on impulse. There is no time when you’ll be more tempted to spend money on crap than when you’re feeling deprived. And don’t go to a payday loan company.  With costs ranging from 300-900% annually when you include the set up fees, interest, services fees and loan repayment fees, this is a hole you’ll never climb out of. Don’t go there.

If you’re already walking around with a bunch of debt, time to call your creditors. Explain that you’re out of work and need a) and interest rate reduction, and b) a repayment plan that’ll work with your new budget. Take a trip to your bank and see if a consolidation loan will help ease your cash flow. Do whatever you can to reduce your costs and ease the pinch.  This is no time to let pride get in the way of common sense.

Tell everyone you know and everyone you meet that you’re looking for a job. Since many jobs are found by word of mouth, telling people exactly what kind of work you’re looking for is a good way to start.  While lots of people are tempted to stop their job search efforts at this point, resist the urge. You need to have an overall job search strategy that includes a daily job search schedule. Getting a job IS YOUR JOB right now, and you should do it with all the energy and enthusiasm you used to spend working. Schedule your day as if you were going to work, make sure you include some socializing time – unemployment can be horrendously isolating – and keep on truckin’.

Yes, it is hard. Yes, the rejection can be soul numbing. But you can’t just give up and hope something will come along. You have a family counting on you. YOU are counting on you. So get busy. Your next job isn’t going to find you!

There are federal, provincial and municipal services that may be able to help. Get out there and find out what they are. Use the internet to find opportunities for you to throw yourself at prospective employers. Update your resume. Post it everywhere. And tell everyone to tell everyone. You need a job!

If you hated your last job, then now is the time to start thinking about a career change. Can you use the time you’re not working to upgrade your skills or take some night courses to retrain for something new? Would this be a good time to turn that hobby into a business?

I am not recommending you remortgage your house and buy a business because you’re desperate. Hey, people do this. What I’m suggesting is that if there is something you’ve always wanted to do – be it landscaping, web design, freelance writing, or small engine repair – now may be just the time to start making some money doing what you love. If you can turn it into a viable full-time business, good for you. If it brings in extra money while things are tight, that’s good too. And if you find a full-time job and can keep doing your biz on the side, hey, that’s alright  too, isn’t it? 

The unemployment rate in Canada hit 6.2% in July, despite record high employment rates in Alberta, Manitoba and Nova Scotia. With all the crap happening south of the border, unemployment is likely headed up in the short term as we deal with the credit crisis. Often, when we find ourselves out of work, we duck and hide, embarrassed at our change in circumstances. And we spend. Unwilling to admit that things have changed, and with time on our hands, we spend and spend and spend. Well, if you’ve seen my show, you know where that leads.

In my last blog, I talk about the unemployment rate in Canada and the potential downturn we may experience. I thought I should give you some world figures to put things in perspective.

The credit crisis is causing rising unemployment in the UK, with official unemployment figures for last month the worst since 1992.  The UK unemployment rate is 5.2%.

In the U.S. people are cheering because their unemployment figures seem great compared to elsewhere, but July’s rise in unemployment was the seventh straight; the current 5.7% is the highest rate since March 2004.

According to Eurostat, the Statistical Office of the European Union, unemployment sat at 7.3% in the euro area in June 2008.The lowest unemployment levels were recorded in Denmark (2.7%) and in the Netherlands (2.9%); the highest were in Slovakia (10.5%) and in Spain (10.7%). Poland sits at 7.3%, Bulgaria and Ireland are at 5.7%.

The Organization for Economic Cooperation and Development (OECD), which is made up of 23 European countries and Australia, Turkey, New Zealand, Canada, Mexico, the United States, Japan and South Korea, is predicting an average rise in unemployment in 2008 and 2009.

So what do you do if you find yourself out of work?  Here are 9 Things to Do if You Lose Your Job:

1. Tell your family not to panic. Yes, things are going to be different for the short- or medium-term, but you’ll weather this together. You need to have a clear sense of what your priorities are so that you can work together to get through this without fighting, bitching, snarking, crying, or being a’feard.

2. Tell everyone you know that you need a job. Many jobs never make it to the advertisement pages since people in a company will be asked if they want the job, or if they know of anyone they could recommend for the job. The more people you tell the better your chances are that someone will put forward your name. Be clear about what kind of job you are seeking and what your skills are, and someone may be able to help you get a new job. But also be open to experiencing something new, and using your skills in different ways. If you hated your last job, don’t get another one just like it.

3. Apply for employment insurance benefits. While this is usually barely enough to keep body and soul together, it’s still better than a kick in the teeth. If you find employment before your benefits begin you can always cancel the claim.

4. Start looking for a job. Dust off your resume. Hit the web. Some part-time work that supplements your income while you’re looking for a full-time job will help to keep you busy and focused on making things happen. One of the biggest problems with unemployment isn’t just the lack of money, it’s the abundance of time and the sense that this will never end. Get busy.

5.  Cut your expenses. First, you need to cut back to the bare minimum so that you can make your emergency fund (you have one of these, right?) last as long as possible. Ditto your employment insurance benefits, your severance, your partner’s income or whatever else you may have that you can use.  Cancel the cable, decide between the home telephone and the cell phone, don’t buy anything that isn’t food, and consider your quarters your entertainment budget. Second, since you may not find a job paying the same money, you need to decide what your Basic Costs of a Good Life are so you know how much salary you can live without.

6. Talk to your creditors. Don’t ignore your bills. Contact your creditors and explain your problem. Offer to make regular smaller payments that you can afford for a short period of time. Ask for an interest rate concession. Get those credit payments in line with your new income.

7. Embrace change.  In all likelihood if your industry is in retreat you’re not going to find a similar job for similar money easily.  Two part-time jobs may be as good as one full-time. Contract work may be a good option for rebalancing your life. Business opportunities may present themselves and you’ll have to have your eyes open to take advantage of them. Don’t be closed to a relocation if that’s what it takes to get you back on track.

8. Take care of yourself.  Don’t climb on the couch and hide. Don’t dig into a big tub of cookie-dough ice-cream. Don’t stop exercising, socializing, empathizing. If you find yourself becoming really sad about your situation, find someone to talk to about it. Don’t let yourself go into a nose-dive. Keep to a schedule and keep your focus. Volunteer so that you can keep meeting new people, widening your network, and putting more people into the job-hunt on your behalf. Take a course to update your skills or learn new ones.

9. Keep your sense of humour. When things get tough, our funny bone is the first to go. Don’t let it. You can do so much when you’re smiling. Your interviewers will see you differently. Your family will be reassured. Your friends won’t run and hide when you call. Hang on to that funny bone!

There’s no longer such a thing as a Job for Life. Gone are the days when you retired from the first company that hired you. The new reality is that you can expect to have up to eight – count ‘em EIGHT – careers over your working life.

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