ESS Managing Unemployment

Managing Unemployment

We take pride in our skills. Our work provides for our families. Our jobs are a vital part of how we feel about ourselves. Our co-workers are often thought of as an extended family.

"Job loss seems to result in a serious erosion in people's sense of control and self-esteem" says William R. Avison, Ph.D. professor of sociology and leader of a University of Western Ontario study of job loss. "And since control and self-esteem are two linchpins of mental health, it is no wonder that unemployment affects people so deeply", he says.

Certainly the impact of job loss goes far beyond mental health. Extreme stress can make a person vulnerable to a wide range of physical health issues from headaches to heart attacks.

That is why losing your job is traumatic - whether it means temporarily losing the entire family income or a portion of it.

Unemployment is difficult and will change the way you live, but it is not the end of the world. If you know where to turn and can take control of your situation you can survive unemployment and reduce the negative impact of temporary joblessness on you and your family.

Talk to your Family

Unemployment is tough on the whole family. Your spouse and children may also feel helpless. Talk out your problems and plan together. Set a new budget as a family. Explain your situation to them and include them in developing your plans to deal with it.

It helps to give each member of the family some positive steps they can take to help. By sharing the burden and pulling together, members of a family grow closer together and draw strength from one another. A professional family counsellor may also be helpful.

Take Control of Personal Finances

Unfortunately your bills won't stop once your pay cheque does. It is important that you stretch the money that you do have. During this period it is important to have a plan. Below are some tips to get your plan started (adapted from an AFL-CIO Survival Guide to Unemployment)

Prepare a Complete Budget

Use a household budget worksheet to see where you spend your money and where you can save. Do this as a family project. Expenses should include:

Fixed Expenses: mortgage/rent, taxes, insurance, loans, installment payments, credit card payments, child support, any fixed payment

Variable monthly expenses: food, gas, repairs prescriptions, utilities, child care, recreation

Future expenses: income tax and other outstanding debts

Budgeted income should include: all income, savings, severance pay, union strike assistance, employment insurance, WSIB income, accrued vacation pay, refund from pension funds and any pension money you are collecting.

List Assets

Other assets may include:

Cash value of insurance policies
Prepaid funeral policies
Equity in your home
Resale value of vehicles or recreational equipment

Set Priorities for Your Expenses

List payments in order of importance. This will help you pay first things first when money is short. The most important will be mortgage/rent payment followed by utilities, health insurance and car payments. Child support or alimony payments are also a high priority.

Make a Complete List of Creditors

List the following information for each creditor:

Name
Address
Phone number and contact person
Account number
Total amount owed, payment schedule and amount
Interest rates

Notify Your Creditors Before You Get Behind

Determine how much you can pay on each bill. If you need to negotiate a lower monthly payment than your creditors expect, notify them before you get behind. They will want to work with you rather than let things get out of hand.

Contact creditors in writing. Tell them you need to work out a plan for delaying, reducing or refinancing payments until you return to work Always include your account number, phone number and address in all correspondence, keep copies of your letters and follow up by phone

Pay What You Can

Even if you can't pay the amount creditors want, pay something regularly. Partial payments may keep your account from being turned over to a collection agency.

Stay in Touch with Creditors

After your letter, keep in regular contact with your creditors. This reassures them, shows a responsible attitude and may keep them from harassing you.

Stop Credit Purchases

Stop using all credit cards. Interest on most credit card purchases is extremely high. If you have advance warning that you will be out of work, try to make larger payments to reduce the balance you owe.

Reduce Household Expenses

With your family, plan reductions in household expenses to stay within your budget. Here are some tips to help:

To cut food costs

Plan less expensive meals and use leftovers, prepare from scratch
Only shop when you need to, make a list and stick to it, compare prices and brands
Use coupons
Consider food co-ops, farmers' markets or picking your own (apples, berries)

To cut telephone costs

Switch to a money saving rate plan
Make fewer long distance calls
Cancel phone features like call waiting
Discontinue cell phones and pagers

To cut energy and fuel costs:

Turn off lights, TV and appliances when not in use
Cut back on the use of power hogs such as hair dryers
Lower the thermostat on your hot water and furnace, or turn up your air conditioner
Wash and dry only full loads of clothes and dishes
Eliminate unnecessary car trips

Consult your local Credit Counselling Service for help.

To cut service costs:

If you come from a closure or workforce reduction, set up a Barter System for Services. Bank your talents (i.e. plumbing services) and withdraw unneeded services (i.e. carpooling or child care)

Sell What you Don't Need

Consider selling that extra vehicle or boat you rarely use. Look at your possessions to see which items could be sold or traded without really changing the way you live. Hold a yard sale.

Check into Other Financial Resources

Life Insurance: Review your policy or talk to your insurance agent to see whether you can borrow against your policy

Pension Funds: Talk to your Union Representatives or employer to see whether you are owed a refund on your pension fund contribution or from other company funds

If you have older children that are working you may have to temporarily incorporate their earnings into the family budget until the situation changes.