Between Jobs?

Losing your job or facing a drastic drop in income is one of the most stressful events a person can experience. Unemployment can mean sudden lifestyle changes for the entire family. Because there is less money to spend, you must decide how to spend what you have. Whatever changes unemployment brings, everyone feels the impact.

When you are between jobs, the paychecks may stop coming, but the bills don’t. When you don’t have enough to cover your monthly expenses and pay creditors, you face some tough financial decisions.

“Concern about how to pay day-to-day expenses can become overwhelming,” says J. Michael Collins, University of Wisconsin-Extension family and consumer economics specialist and assistant professor of consumer finance at the UW-Madison School of Human Ecology. “Credit cards or a home equity loan may provide some financial resources for a short time, but many lenders are cutting back on credit offers. Unless your situation turns around quickly, more debt only creates bigger payment obligations later.”

Instead, focus on cutting your spending. Make a spending plan so you can pay bills when they are due and avoid late fees. If you cannot make payments, call your creditors to ask if they can reduce your payments temporarily until your situation improves.

“Every minute counts, says Collins. “Taking charge of your new financial situation is a the most important contribution you can make to your family’s well-being, and basic money management will help reduce stress as you adjust to living on less income.”

Below are some specific steps that you can take.

  1. Talk openly with your family about the situation. Be optimistic but honest about how long money will be tight. Include kids in the conversation so that everyone understands and supports the reductions being made.
  2. Reduce your expenses. Consider your “needs” versus “wants.” The little things add up; consider that if you reduced spending on something simple, such as packing a lunch instead of buying one, you could save $5 or more a day to save $1,825 per year!
  3. Restrict the use of credit to emergencies; otherwise you will have a deeper hole to dig out of later. But a critical home or car repair, or health emergency, may leave little choice.
  4. If you think you may have difficulty with payments to creditors, talk to them right away. Have these conversations before you fall behind on payments. Creditors will often accept a partial payment which can make a difference to your credit rating-and will cut down on the stress of avoiding creditors.
  5. Consider selling property or assets, especially if you can use it to pay off debt or reduce expenses. For example, selling a boat could pay off a boat loan and reduce maintenance and storage costs.
  6. Consider ways to boost income. Can your spouse or partner find employment or more income? Can you find part time or contract work? Even low-wage jobs can help.
  7. Make sure you have health care coverage. Explore low-cost options through employers, as well as state programs such as Badger Care (see

Find out what community resources are available to help extend family resources. See what state programs you qualify for at:

Use The-Wallet-Tracker to better track your spending.

See the UWEX Managing Between Jobs Series at the Publications Store.

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