Being unemployed can be a terrifying situation to find yourself in. Having no income means that you can easily fall behind financial obligations, have trouble with your day to day expenses and in extreme circumstances it can even inhibit you from finding a new job. How long can you afford to be unemployed? Let’s take a look at the numbers.
Economy and enemployment
In the first month of 2014 the economy was still on shaky foundations. According to the Atlantic it took the average worker almost six months to get a job, whereas in February of 2015 that time period was cut by half to just 3 months. The correlation between a sluggish economy and anemic hiring should come as a surprise to anyone with two brain cells to rub together, but someone that has been long-term unemployed (without work for 27 weeks or more but still actively searching) may recieve lower initial salaries when re-hired.
Most developed countries have some sort of worker welfare systems in place, the percentage or amount of monthly allowance differs greatly though. In the U.S. workers that were terminated for reasons other than their own fault are entitled to 40-50% of their previous salary for a period of six months although in the post-recession economy Congress passed a bill to extend it to one and a half year. In the U.K. the allowance is around 100 sterling a week, plus housing. Some countries have a workers’ insurance of sorts which they pay into when they are employed an in the case they lose their job they get paid from that (like Canada). The length of time the person gets paid benefits depends on how much money they paid into their insurance.
How to survive
Budgeting is crucial for anyone, especially someone that is on a fixed income. One of the biggest expenditures people experience according to Forbes.com is housing which should equate to 25-30% of one’s income. Beyond that food is also a (necessary) high expense at 10-15%. If possible, you should try to find ways to restrict those two expenditures.
For housing trying to find a roommate or the dreaded: moving back home could lessen or even diminish your financial burden. For food, instead of buying name-brands try the supermarket in-house branded products or generic products. Of course, controlling your budget is a temporary fix and employment should be your ultimate goal.
The next step
So you are coming to the end of your benefits, what do you do? Don’t let them run out! Start your job search as soon as you lose your previous position, giving yourself ample time to explore your options, and avoid having a huge gap in your work experience. Sure your first impulse might be to panic, but weighing your options, figuring out what you’d like to do might be a golden opportunity for a much needed career shift.
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