For the average person, our jobs are our main sources of income. Not every person has the capacity to invest in passive income, whether due to lack of time or lack of money. So, when we lose our jobs, we most likely go through financial struggles. Also, when we lose our jobs, oftentimes we’re not prepared for it. That’s when we realize that our monthly expenses need to be financed through stable income.
First thing you should do if you lose your job, is immediately find a new one. We’ll talk in detail about unemployment benefits, but you should keep in mind, they’re not supposed to be your sole income source. Ask your family, friends, community members for help finding a job as it’s the only way you can develop your financial status in the future.
What Is Unemployment Insurance?
The Department of Labor created unemployment insurance programs to “provide unemployment benefits to eligible workers who become unemployed through no fault of their own and meet certain other eligibility requirements.”
Since unemployment insurance was created as a result of a joint effort between the state and federal government, the benefits will vary according to the state you apply in. Unemployment insurance rewards eligible workers with cash benefits to help through hard times.
How Can I Be Eligible For Unemployment Benefits?
As mentioned before, every state has different requirements and benefits for eligible workers. To learn more about unemployment benefits in your state, you should visit this website. However, there’s a base set of qualifying criteria:
- To qualify for unemployment benefits, you must have lost your previous job without it being your fault. That means you can claim unemployment benefits only if there’s no work available for you.
- There are certain work and wage requirements that you must satisfy. You have to meet the minimum wage earned and/or time worked standards. In most states you’ll need to have worked for the past 12 out of 15 past months at the time you’re applying for the benefits.
- There are additional eligibility clauses that you must satisfy that vary from one state to another.
How Can I Apply For Unemployment Benefits?
The process of applying for unemployment benefits is pretty straightforward. However, you need to make sure to provide truthful and accurate information to avoid any delays or problems.
- Once you become unemployed, make sure to contact your state’s unemployment insurance program.
- Make sure to apply for unemployment in the state where you worked. If you now live in a different state from the one where you worked, or worked in different states, your current state’s unemployment agency can guide you to apply for the benefits in different states.
- When you apply for unemployment benefits, you’ll have to answer questions regarding your previous employment. That information will include addresses and dates for your previous occupation. Make sure to answer all questions accurately to avoid any delays.
- It should take somewhere between two to three weeks to receive your first benefit check after applying successfully.
What Should I Do With My Unemployment Benefits Money?
It’s clear now that you only get this money when you struggle to find a job. If you’re in need of unemployment benefits, that means that your financial situation is not the greatest. It only makes sense to say that you should spend the money on necessities only. Your highest priority is to keep yourself and your loved ones safe and well-fed. If you already own the home you’re living in, congratulations, you don’t have to worry about rent, unless you have a mortgage to pay, then you should have a chat with your lender. If you are paying rent however, you should consider whether or not you’ll be able to afford the same place, if not, you might need to make some changes.
Ok, so we agreed that rent must be taken care of first, as you’ll always need shelter for yourself and your loved ones. Second comes other monthly bills. Obviously it would be pretty difficult to live in a place without water and electricity (and probably internet access too). So, you should definitely keep those expenses in mind, and at the same time, try to find a way to lower them.
Equally important would be putting food on the table. Your health, as well as your loved ones’ health are a top priority. Needless to say you shouldn’t be expecting to have lobster and caviar on unemployment checks. Doing grocery shopping and cooking for yourself at home can definitely save you a pretty penny. You should also consider doing your grocery shopping in corner stores and 99 cent stores, since Wholefoods will be a bit out of your budget.
Things To Look Out For When Spending Your Unemployment Benefits
With money being tight and bills slowly starting to pile up, it’s easy to forget about some obligations. These obligations can vary from saving up for a rainy day, all the way to making sure your taxes are paid. Everyone’s life expenses are different, but we’ll try to point out a few things that everyone should look out for.
Putting Money Aside For A Rainy Day
This might sound out of place, considering the tight budget and financial situation an unemployed person would have. But a general rule of thumb is that a person should try their best not to spend all the money they have. There comes a time when unexpected expenses come out of nowhere. Some expenses might be substantial, such as health care. Other expenses might be little, but they pile up, bit by bit. So, once you’ve taken care of all the necessities, i.e food, shelter, and essential bills, calculate how much you can put aside.
Whether you’ll save money for medical bills or for an important family visit in a different state, every bit that you save counts. Don’t be disappointed when all you managed to save this month is $50. You should instead celebrate the fact that you managed to save money under a tight budget.
You’ll Still Need To Pay Your Taxes
Just because you’re living on unemployment checks doesn’t mean you’ll stop paying taxes. We know it may sound disappointing, but the federal government still expects you to pay taxes based on the money you get through unemployment benefits.
Alright so here’s how it works: You need to report your unemployment benefits when filing your taxes. You do have the option to withhold 10% of your benefits for tax purposes, but you don’t have to do that. As a matter of fact, experts advise against it unless you’re sure you can live off the rest of the money. However, if you think it would work out for you, then you should fill in the IRS Form W-4V.
Time For Some Temporary Lifestyle Changes
It’s pretty simple, a tight budget means prioritizing your spending. That means you spend your unemployment benefits on what’s important and avoiding wasting money on things you don’t need. Take the time to consider what unnecessary expenses account for a significant chunk of your budget.
Starting with intoxicants, such as alcohol. Cutting down on intoxication wouldn’t just save you money, but would also help you focus on more important things. Second comes luxuries. You should try to pamper yourself with little things, every once in a while. However, spending money on expensive brands of foods and clothes will be regrettable if they affect your overall livelihood. Even the small things, such as paying for your music services, such as Spotify will have to wait. Find cheaper alternatives. Remember, every dollar you save is a dollar you get to keep.
Speaking of cheaper alternatives, if daily expenses such as car gas and maintenance are costing you too much, look into taking public transportation. Make your sandwiches at home instead of going to bodegas. If you need new clothes, buy them from discount stores instead of buying expensive brands.
We All Have Bills To Pay, But Some Of Them Can Wait
According to experts Americans owe over $1.4 trillion in auto loans and over $1.5 trillion in student loans. It may come as a surprise to you, but banks can be somewhat understanding of your situation. Obviously, banks are looking out for their profits. So, it’s in their favor to help you find a payment plan that better suits your financial situation. Hence, if you have any outstanding debts, make sure to contact your bank to figure out a better way to pay them back.
Pay For Things Using Your Credit Card
This may sound redundant, but it kind of makes sense. Yes, paying for things with your credit will pile up more debt down the road. But, besides giving you the chance to buy things you need right away, you also pay for them later. But, it’s very important to remember DO NOT BUY THINGS YOU DON’T NEED using your credit card.
There’s No Such Thing As A Free Dinner
It’s pretty great that the federal government gives out those unemployment checks, but that doesn’t mean we stop looking for work. Once you face unemployment, you should start finding another gig right away. You might need to make some sacrifices. The economy is pretty unstable right now, so if you find jobs that might not pay as much as you’d like, at least consider them. In the meantime, try to find some cash-in-hand jobs, even for just a few hours a day. Some income will always be better than no income at all.
Make Sure To Apply For Unemployment Benefits Every Week
Ok, so you’ve filed a claim for unemployment benefits and received your first check. It’s important to know that you need to file for unemployment everytime you want to get that check. You should also keep a work log. To receive your benefits, you must prove you’re looking for jobs. That doesn’t just help with your claim, but can also help you find a new job. Your work log must contain at least three different attempts at finding jobs. If you fail to prove you’re looking for jobs, you might not be able to get your unemployment benefits.
Look Into Extending Your Benefits
Unemployment benefits are not there to last you forever. But, if you need them for longer, you may be able to apply for an extension. The extended period will vary from one state to the other. Some states will offer a 13 week extension, while others will offer a 26 week extension. Honestly, you should just apply for it, who wouldn’t want extra money in their pockets?
There are some qualifications that you must satisfy before applying for an extension. These qualifications are:
- You already finished your regular unemployment benefits
- You’re still out of a job, but also still looking for one
- You live in a state where unemployment rates are high
Losing your job is a difficult situation. Not only does it affect your daily life, but makes affording things a more difficult challenge. But the federal government is here to support people going through that ordeal. Remember to keep your employment records accurate and apply as soon as you can. It’s also really important to remember that unemployment benefits are not as good as a stable salary. So make sure you budget your spending and start looking for a job straight away. In this economy, we should always work on improving our financial situations, instead of just waiting around for help.