What do you do when your Unemployment Insurance runs out

unemployed man with text 2

Dimes make Dollars
How to create an extra month of living expense money on an already severely limited income

As an Alberta resident and a veteran survivor  of several economic “recessions” I was surprised and yet not surprised to see an unfortunate question that came up on one of my Facebook pages recently.  The poster stated that her sister, who was laid off last year, has been unable to find employment since her layoff, and she questioned, “What does she do when her Employment Insurance runs out?”

In the early 90’s I spent a lot of time laid off. I never had any savings and I never got any kind of severance. What I did when I went through these times was hoard away enough money and goods to try to buy me another month of living living expenses to provide a cushion.I did this in several ways. For one thing I  worked temp while on claim. I registered with the temporary employment agencies.  I did administrative assistant office work, and I was not specialized in anything.  The temp agencies would send me to temp jobs and then I would claim the earnings from those jobs weekly on my report.  I was allowed to keep my  earnings although the amount was deducted from my EI cheque,  and my earnings were EI insurable which meant that I was building weeks up that could be applied toward another claim in the future.  When my current claim ran out I was creating enough weeks to initiate another claim.

Being in receipt of EI gives you breathing space or temporary relief but it in a challenging economy it is  wise to plan for a second loss of income that may occur when the benefits run out if no employment has been found.It is the understanding that your full time job and obligation while on claim is to look for for work.  This link explains current EI rules including rules for working while on claim.
http://www.esdc.gc.ca/en/ei/regular_benefit/while_receiving.page

The objective here is to implement a plan to gather together enough money and food to carry you through one month of no income whatsoever if you do run your EI out.  Being unemployed is a tough situation.  I found that it always helped me to have some kind of a concrete, implementable plan B in place to buy me time.
Here are some suggestions to help with that objective:

1.  Sock away staple grocery items for future use.  Use your PC points, download a coupon app like Flipp.   https://app.flipp.com/

2.  Save every bottle and can that you have during your period of unemployment.  If you are accustomed to donating them to the kids that come to the door, hold off on the donations.  The bottles accumulated may be the difference between making a utility payment or not.

3.  Try to save your small change.  It adds up.

4.  This is a passive way of making a few bucks while you are sitting around at night doing nothing but it does result in real cash.  Sign up for Swagbucks or similar survey programs and do a couple of surveys a day.   You can make about $25.oo per month that pay into a Paypal account.  http://www.swagbucks.com/

5.  Download apps like Checkout 51.  This app allows you to get cash back on purchases that you make. You can claim when you have $20.00 in allowable purchase receipts.    https://www.checkout51.com/faq

6. If you have not missed any mortgage payments and you feel that you may not be able to make your mortgage payment after your last cheque comes in contact your bank to see if you have a provision to miss a payment.

7. Borrow money from your whole life insurance policy if you have enough cash value in the policy to borrow from.

8.  When your claim runs out you may qualify for assistance from Social Services (now known in Alberta as Alberta Income Support/Alberta Human Services),  or the “Big W” as we called it.  It was not a pleasant experience, but I count it up as a life experience.  They did give me a bit of money that helped me make my mortgage payment here and there when I needed it for a month or two.  I was a single parent and I hung on to my house with everything that I had and in the end I was able to keep my house.  I paid off the mortgage 3 years early a couple of years ago.  These funds come from tax dollars, so if you worked before you applied for them you helped fund what you are now receiving.

 

 

 

 

 

Drastic moves… Like moving back in with your parents

crisis with text

#biggest loser or # winwin

Many years ago when I was a single parent living in a small home, the economy and other unfavorable financial situations made it necessary for my mother to move in with my 13 year old son and I.  The house was small, there was very little privacy, and none of us were really happy with the situation.  More and more as a result of economic pressure in the way of job loss, rising taxes and the rising cost of living, people are finding it difficult to live independently.

You can work toward being the most frugal person in the world but the rising cost of living points to a future wherein it may not be possible for two working people to sustain one household.  It is becoming increasingly difficult for two full time income earners to pay  a mortgage, utilities, food and childcare. The best crafted budget in the world can only withstand so much belt tightening. In order to cope with the increased expenses and/or reduction in income, people are left with having to find more creative means of meeting their needs.  Either you need to bring in more money or you need to cut expenses in other areas to get by, but at some point you can’t work any more and you can’t cut any more. I see a day wherein there is a melding of the nuclear family and the the joint family living arrangement common to many south Asian cultures.  In the traditional North American culture of the nuclear family living arrangement is it possible for two or more families to cohabit in one dwelling in order to prosper financially?

Granted, it is a suggestion that may be met with considerable resistance withinin the mainstream North American culture but with our culture becoming increasing ethnically diverse, it bears consideration, albeit in a modified form.

The culture in North America embraces a lifestyle wherein children are expected to move away from their parents home to go forward and create their own households.   Traditionally we embrace the tradition of the nuclear family. The drawbacks to the nuclear family model include maintaining large houses for relatively small famlilies, having children and then paying large sums of money for someone else to care for them while we work, and eventually paying for the care of our aging parents.  We tend look negatively upon adults still living at home.  Situatations wherein families, due to varying circumstances, have to move  back in with parents require apologetic explanations such as “Oh yes,  Jack and Jill are a little down on their luck due to the economy so we are doing what we can to help them out, and once things get better they will certainly get a place of their own.”

Other cultures, notably the  East Indian culture embrace the  joint family arrangement. A joint family arrangement consists of several family members spanning several generations living in one home and contributing jointly to the economy of that household.  It allows for money from several contributers to flow into the home, thereby dividing the cost and the work of running the household.   Childcare may be carried out by senior members of the household and elderly members are cared for by younger members.  There are more people contributing financially to the household so it increases the number of financial “eggs in the basket”. The article below provides an in depth look at what  life in a traditional joint family looks like.
 http://postweddinglife.com/living-joint-family/

It is pretty doubful that people that are familiar with life within the nuclear family could see themselves in this type of living situation.  The economic benefits are well spelled out in this article, but so are the negative aspects.  People that have been raised in a joint family situation and have the expectation that they will carry on living in that tradition don’t necessarily have any other frame of reference to compare it to, although it is inevitable that some members of these families may be attracted to the nuclear arrangement.

Despite the economic advantages of a joint family setup it is so different than the traditional nuclear family that it would be a tough sell in to those that know nothing outside of the nuclear family.  It is challenging to define a housing model that make the melding of the traditional nuclear family with the joint family more palatable to a privacy and independence loving population. It requires an ideological shift by the people affected by the change and by municipalities in terms of neighborhood planning. There needs to be housing that provides something more expansive than the single family home with a nanny suite, something that offers the ability for several families to live in one dwelling with enough common area and enough privacy for family members.

If we were to rethink how we could comfortably accommodate several families in one home, what could that home potentially look like? My brainstorming of what might consititue something that might be a starting point to an acceptable form of joint family housing suitable to those only familiar with the nuclear family  led to a housing model that is based on a retirement lodge.  If you are unfamiliar, the basic setup is like this:  each resident has a suite equipped with a private living area, and a bathroom.   The more expensive lodges may also have a full bedroom, a living room, a private bath and a full or partial kitchen area.  In all of these lodges there are shared common areas such as a kitchen that prepares food for the entire population and a dining hall that can be used by all lodge members.  There are also shared common areas where people can gather to socialize, watch TV or hang out.  It provides a large number of people shared housing and privacy at the same time.  This is a macro level example, but I can see a micro level, more suitable to a family living situation, based upon this type of model.

Eventually, with the diversity of the population and changing economic needs I see it as inevitable that municipalities will have to come on board to recognize the benefits of multifamily dwellings.  How do you build larger dwellings without compromising other services that cannot be placed on that land?   How  is parking impacted by family dwellings with several vehicles?

But the toughest sell will be to the population that is increasingly finding its family members forced to live together for longer periods of time in order to survive economically.  We need to find a way of combining the joint family living arrangement with the nuclear family in such a way that it promotes acceptance by those entering into and and by the municipalities that they live in.  Unless of course jobs are created for all, taxes and levies and delivery fees for services are permanently reduced, and the cost of all goods and services  goes down and stays down.  The odds are not in your favor if you are betting on that to happen.

 

 

 

 

 

 

 

 

 

Getting back to Budget Basics

credit cards with text

Back to a Budget of Austerity

Well I am back to living on the Austerity Budget.  The Budget of Austerity is what I call the budget that I use when I am about one step up from survival mode.  It covers the purchases of basic needs, and I look harder for deals and sales and use coupons, and Groupons.   The reason for this is that  I took off most of the month of March without pay, took a 2 week  vacation, purchased a new king sized bed, attended a convention and co-hosted a party of 100 people.  I had enough money saved in anticipation of March, but did end up digging into my savings to pay for some of it, and all of it I paid for with my credit card in order to collect travel points.  I am not favorable toward carrying a balance though and as of last week I had some work to do in order to pay off my credit card and money that I had taken from my line of credit before there was any opportunity for interest charges to kick in.

credit cards

In order to pay off my credit card and take my line of credit to  a zero balance I lent myself money from a retirement savings account which I use as my emergency fund.  I still have enough money in the account to carry me through at least 3 months of income loss. I am not suggesting that people deplete their emergency funds to make frivolous purchases. The vacation, party, conference and new bed purchase were not an emergency situation – they  fit the category of wants, not needs.  However, I will not carry credit card debt or keep my line of credit in an interest incurring state and I needed a way to pay them down, so I lent myself the money to pay off the frivolity.

bank loan

In order to pay off my the outstanding balances on my credit cards and line of credit I borrowed money from my emergency fund.  This is a registered retirement savings account. It is not my retirement fund, it is a place that I put money in order to defer taxes and it functions as my emergency fund. As with any loan,  I need to pay back my loan that I took from my registered fund. Because it is a registered plan, the government withheld 10% for taxes. I received exactly enough to pay off my credit card and my line of credit.

Now I need to pay back the loan and I need to have the money back in the account by Feb 28, 2017.  In order to do this I have added  $150.00 per month to my regular monthly budget to deposit back into the fund. I will roll in monies from my biannual work bonus into it as well.  By doing this I will be able to repay the loan, I will not have to pay any taxes on the cashed in registered retirement monies at tax time, the money will be back in my account, and I will not have paid any interest on the purchases.  Again, this retirement fund is not the monies that I will use for my retirement, it is monies that I keep as an emergency fund, and I still have enough money in it to satisfy my emergency fund requirements.  The last time that I borrowed from this account, I used the monies to pay off the $18,000 remaining balance of a mortgage loan on  property that I own.  I paid off that mortgage 3 years early, freeing myself of a $667.00 monthly mortgage payment.  That was one of the things that I did that allowed me to cut from full to part time employment.

Over time, it is easy to become complacent with your money and to deviate from your budget, particularly if you have come through an income loss and have adjusted to the financial revisions of that income reduction. This is what happened to me this spring.  I thoroughly researched  my finance my vacation,and all of the other things that I spent money on in order to get the best deals possible. It is obviously not something that I would have been able to do in a financial crisis mode. After a crisis period subsides and you learn to creatively to modify the means that you use  meet your needs, a complacency can set in.  It’s like cheating on your diet.  Whether it’s a small cheat or a big cheat, it’s best to have a plan for getting back on budget.

 

Life after Layoff: How to Survive and Thrive

10 Things to do after a job loss

guy with dollAR

If, like a lot of people, you have enjoyed steady employment, and a reliable income, you have built a lifestyle and entered into a comfort zone associated with that lifestyle that may come with a hefty price tag.  We have ways of justifying our activities, particularly the high end activities such as travel, entertainment, clothing and personal luxuries such as massages and mani/pedis.

Getting-Fired

So now there you are.  Out on the street with your box containing your coffee mug, the contents of your work cubby and your layoff notice.  Job loss can happen at any time, for any reason.  It may be as a result of economic downturn, sudden illness or disability, or in some situations by choice.  Whatever the reason, whether it be by circumstance or by choice, how prepared are you to be suddenly without all or a significant portion of your income?

Loss of income brings personal stress, financial stress, relationship stress, loss of confidence, hopelessness and nights spent tossing and turning while trying to figure out how to handle the situation and how to move forward.

So how can you prepare for this?  The experts suggest that you have enough savings to cover basic expenses for 3-6 months set aside in an emergency account.  Most people don’t. If you find yourself suddenly out of work with in an emergency situation with no income source, no severance pay, no savings, no plan and only the money in your pocket, here are some ideas for you.

1. Revise your monthly budget or create one if you don’t have one.  List all of your absolutely non-negotiable monthly expenses.  Remove any unnecessary expenses that constitute wants and not needs.  Pare your expenses down to bare minimum to determine the least amount of money that you can survive on.

Gather enough money to hold you over until the Unemployment insurance comes in and recognize that when it does come in you will be living on a reduced amount of money. With a straightforward claim it may take 6 weeks to receive the first cheque after filing. Calculate how much you will need to just get by until the first payment comes in. The most important priorities are the roof over your head, food and medicine and transportation to look for work or to get to work once you find a new job.

2  Contact your local food bank and social service agency to determine whether you may qualify for any financial assistance.

3. If you have things that you don’t need or use that you can sell on online or by any other means, gather them together and find a way to sell them.  Online selling sites, garage sales, pawn shops and social media are all good places to consider if you have things that you can sell and need to to sell them quickly to raise cash.

4. Contact your bank to see if you can skip one month mortgage or car loan payments. If you have to be late with your rent your landlord will serve you with a 14 day eviction notice, but the notice is void if you pay the rent within the 14 day period.

5 .Check to see if you have any points on any of your credit cards or points cards that you can cash in use to cover expenses. If you have loyalty points with a grocery chain, now is a good time to use them to stock up on food essentials.

6. Get your resume in order. There are different types of resumes.  If you are a professional and know that you will be competing for entry level retail positions with hundreds of other people, you need to “dumb down” your resume.  Walmart may not want to hire you to stock shelves if they know you are going to bolt back to your old line of work as soon as the economy picks up. Update your Linked in Profile.  Contact the people on your contact list and let them know you are looking for work.

7 .If there is a neighborhood Facebook page or website, put it out there that you are looking for work.

8. Contact and register with Temporary “Temp” work agencies.

9. If your Unemployment Insurance claim is denied, appeal the decision.

10.  Revise your priorities. The immediate period after layoff or job loss is about survival.  It is a time and find a way to create a plan B.  If there has to be a silver lining let it be redefining the way that you thought that you had to live in order to live dream or keep up with the Jones or just to live within your own comfort zone.

With creativity and a new plan based on info that you were unaware of or never has a reason to pay any attention to, there are alternative ways to rebuild your life and to fulfill your wants and needs.

 

What is a HighEndCheapskate

Definition

lady with drinks

A HighEndCheapskate is someone that recognizes the fluidity of the economy and has learned how to define and meet their needs and wants under a wide variety of financial circumstances. A lot of people consider themselves to be thrifty, money conscious, and deal savvy by nature.  But there are also a lot of people who have never really thought much about it.  They spend as they please, seldom looking for cheaper alternatives until for whatever reason they have to.  Then, with no tools at their disposal, they are left wondering how to fill their needs and wants on perhaps a drastically reduced budget.

Despite the good advice that while you may starve as your are working your way through College, you are working to secure your financial future. Life does not necessarily heed that advise, and throws financial curveballs at you from time to time.  These curveballs that create negative income change may be planned or unplanned, such as a termination of employment, a maternity leave, retirement, or just a desire to work less without rendering your standard of living unrecognizable.

Here is an example of the difference between a tightwad,  Average Joe and a HighEndcheapskate. These are all people that have different concepts as to what constitutes saving money.  Suppose you take a vacation.   Its time for dinner.  The tightwad may not even be there.  He may be too cheap to take the trip at all, so he is at home.  If he is there, is there and he and his party hit up a fast food burger joint.

hot-dog-1-1497549-640x480

 

Average Joe is the guy at the beach front patio restaurant paying full price for his meal.   The HighEndCheapskate is the guy at the table next to Average Joe.  He is enjoying the same ambience and maybe even the same meal, but at half the cost because he remembered to purchase his groupon for the restaurant before he departed for his trip.  Average Joes Bill is $100.00, HighEndCheapskates bill is $50.00.

a-meal-in-front-of-the-sea-1323245-640x480

HighEndCheapskate is about having the mindset and tools to get the best bang for the buck. It is about creating a lifestyle that combines financial thrift with savvy in order to get what you need or want in good or challenging financial circumstances.  Its a mindset of achieving wants and needs and the means of obtaining them by utilizing tools such as prioritizing, resisting impulse buying, researching options, and sometimes making compromise. It is about refining your spending habits to get you through good times and bad. It is the ability to deal with anticipation of income reduction and creating and navigating these situations in order to not just survive financially, but to meet the challenges and to thrive is a financial crisis and thereafter.

Bang for the buck, creating new expections and a new mindset in order to fulfill your needs and wants is what being a HighEndCheapskate is all about.   It is a combination of being thrifty, frugal and debt free, (0r working toward it),  and having and doing as much as you can while working with what you have to work with.  Being cheap for the sake of being cheap is like having a method without any madness at the end of it.  There are reasons to be frugal, such as:

1.Survival Mode:  Survival mode is about meeting immediate needs and moving forward after income loss or reduction. People that have suffered income loss that are trying just to get by and meet basic needs and dealing with the fact that it is difficult to meet these needs.  There are wants too.  Just because you are flat broke doesn’t mean that you don’t have wants.  It requires creating and adhering to a basic and tight budget, a budget of Austerity.

2.Ongoing Cheapskate:  People that are a step past Survival Mode.  There is enough income coming in to get by, but there is an ongoing need to acquire needs and wants creatively.  There is more flexibility in the budget.  Example:  Date night of dinner and a movie on Cheap Tuesdays.

3.Cheapskate Splurge:  The Budget of Austerity can be relaxed a bit in order to accommodate the desired purchase.  Example: not booking a flight with points and paying cash because you found a great deal on flight that does not involve a 9 hour layover.

The idea behind HighEndCheapskate is to become competent to handle your finances by recognizing the fluidity of the economy and being able to transition from one mode to another in order to survive and thrive through the tough times and the good times.