There’s an old saying, “When your neighbor loses his job, you call it a recession. When you lose yours, it becomes a depression!” Dealing with unemployment is something we all face at one time or another in life. For many in the USA and around the world, 2020 has given us a refresher course. Unfortunately, COVID-19 not over yet. The incoming Biden administration is not likely to be friendly to liberty – economic and otherwise. Some state governments have become emboldened by their success at implementing draconian regulations. The risk to our economic security is quite real as we enter 2021 and the years that follow.
In the last two years, I’ve had three experiences with unemployment and changing jobs. I’ve dealt with it in the past, and was trained early in life by my parents in the basic skills of managing money and surviving on less. I have maintained a preparedness lifestyle largely due to this training. It might not be a huge crisis like an EMP, nuclear war, or massive natural disaster that affects you. A small event like unemployment has the potential to affect you in major ways, and if you are unprepared it can ruin your life. And unlike a national or global disaster, this private disaster is almost certain to occur someday. Luckily, some of the same preparedness techniques you use for the big disasters will help you with this personal one.
I will start with some good news! Your lifestyle is the thing that will affect your unemployment experience the most – however it is also the thing you can change the most! Part of the American dream still exists, and still benefits people who live prudently and act responsibly. You can somewhat insulate yourself from the effects of unemployment.
I’m in my early 30s, single, male, no children. I have a college education, property, and a stable work history. However, my fields of education and work tend to preclude working remotely. In some cases, those aspects are an advantage. In other cases, those aspects are a disadvantage. Your age and life situation will certainly dictate your response to unemployment. Consider your own life situation carefully. Compare yourself to the typical hiring demographics around you, and investigate the local employment rate. In my area, I’m fairly fortunate that there are large, well-established companies. The unemployment rate is much lower than other areas in the USA, and the economy is healthy. It is difficult to achieve a balance between living away from population centers in a safe area near your retreat, and having plenty of good employment options. If you suspect some aspect of your life is going to make it difficult to find work, the time to change and plan for the future is now, not after you lose your job.
My parents taught me even when I was a child, “Always live beneath your means.” In other words, spend less than you make and stash the rest. It is an excellent basic principle. Statistics vary, but surveys reveal that the majority of Americans don’t have enough cash in reserve to cover an unexpected $400 or a $1,000 expense without borrowing or begging friends and family to chip in. That is a terribly insecure situation. Some people have no choice but to exist with this insecurity, but the vast majority of people can do something about it.
Whatever your life situation, whatever your occupation, you have the ability to create wealth and preserve it.
One saying that is always on my mind comes from Ecclesiastes 11:2, “Give a portion unto seven or even to eight, for thou knowest not what evil shall be upon the earth.” With those words, wise King Solomon gives us both an investing principle and a lifestyle. Diversify what you have, and keep something of value in reserve. For me, that means a balanced combination of the following items, which are mostly tangible:
1. Currency, for immediate and longer-term spending.
2. Stocks/ETF’s/bonds for currency growth during good times
3. Precious metals, to preserve non-currency value in bad times.
4. Real property, as a base of operations.
5. Quality tools, to build a living or work in a trade.
6. Food/fuel/supplies for immediate daily life and long-term.
7. Items that can be easily traded, as well as used for gifts (or bribes)
By keeping a balanced life, you can survive unemployment when it arrives. Remember that the biggest way to keep value is not to spend it. I have observed that the majority of Americans spend too much money on services. Enhance your savings by spending less. Transition to cheaper Internet and cheaper phones. Cut out television and entertainment services. Cut down what you spend on car insurance and other forms of insurance, unless you anticipate an urgent need in the near future. Eliminate your debts and reduce luxuries. These are all broad categories, but they are good life principles.
The less you pay in services, the more you will save and the fewer bills you will have each month. At this point, I only have regular bills for property tax, phone, Internet, electricity, and car insurance. In an emergency, I could immediately cut the three utilities and postpone all insurance, leaving only the taxes. My regular monthly expenses add up to only 30% of my monthly income. That isn’t because I have a great income…I simply refuse to spend when I don’t have to. In an emergency, my life is structured so I can spend even less.
Maintain your skills outside of work, even while you have a job. Learn new things. Every skill you learn is a service that you no longer have to pay somebody else for. And every skill you possess can be turned into a service you can offer if you have time. If relevant, you can list these skills on your resume. Remember to maintain your work-related qualifications and continually update your contacts and your resume. It is much more difficult to start from zero when you lose your job.
Losing a job is demoralizing, and you won’t do your best work when you are worried. Having a contingency plan in place will make you feel much more secure. I have personally experienced both sides of this in one year. The first time, I was already looking for a job. My resume was polished, I had contacts, and the day my boss let me go I already had an interview scheduled for the next morning and two scheduled for the next week. Needless to say, that transition was almost seamless. The second time was a surprise layoff just four months later. I was unprepared, my resume was not updated, and I scrambled to begin the application process. That is not a good start in a bad situation.
Surprise! The worst has happened. The boss has let you go, and your personal crisis has arrived. What do you do now? There are some steps you need to take immediately. While I’m not the kind of person who wants to rely on the government, you should go ahead and file for unemployment the very same day, if possible. The benefits may be meager, but something is better than nothing and it takes the government a long time to get your case processed. When I was laid off from a construction job, I filed the same day and it took five weeks for the first check to arrive. Luckily, I had savings and was in a comfortable position. If you are one of the majority of Americans who can’t cover a month of bills with savings, that five weeks could be a disaster.
Don’t be ashamed to file for your unemployment insurance benefits! Remember, you’ve paid into the system all these years, so you might as well get some of that money back. Follow the rules, do it honestly, and make sure it isn’t your only safety net. If your employment ended suddenly and against your will, challenge the decision. Whether it was a layoff or a termination, assemble all relevant documentation and submit it with your unemployment case. Demand that your employer provide the reason for your layoff or termination in writing. The government often uses termination as a reason not to give out unemployment benefits, so make sure you have evidence on your side. In my case, I was laid off but my employer chose to disguise it as a termination. I submitted documents and testimony to my state, and the government investigated. I received an official letter which stated the results of their findings – that I had done nothing wrong. Not only did my challenge secure my unemployment benefits, but it also lets me tell future employers that I was not terminated but laid off. Securing your good employment history is important!
After you have dealt with your previous employer and the government, begin the process of searching for work. Hopefully, you had some leads before your last job ended, but if you haven’t, the first week is the most important. I’ve noticed that it takes most employers at least two weeks to get around to a resume. If hired, the hiring and document-checking process often takes 2-3 weeks. Even in the best scenario, you’re looking at a solid month between your final day at your last job and your first day at the next job. This is why the first week is the most important. The more contacts you make in that first week, the more likely your unemployment period will be brief. Unemployment is now your job, so treat it like one. Get up early in the morning, get dressed, and go to work. Work hard all day. Maintain a schedule, and resist the urge to succumb to laziness and despair.
(To be concluded tomorrow, in Part 2.)