November 5, 2014
by Michelle Perry Higgins
1. Review your living expenses and eliminate all unnecessary expenses including vacations, dining out, entertainment, new purchases such as furniture, etc. During unemployment these are luxuries that you cannot afford until a new job is secured. Create a new “lean” lifestyle budget in writing and stick to it.
2. Based on your “lean” lifestyle budget, determine how many months you can remain unemployed until your emergency reserves run out taking into account unemployment insurance payments, any severance, etc. Hopefully, you have at least a six-month emergency fund that is already in place.
3. After you have exhausted your emergency reserves to pay for your “lean” lifestyle, you may need to draw on your investment accounts. What funds do you have in your defensive barrier (bonds/cash) that can be used first? What investments can be liquidated with minimal tax implications to pay your bills? You should work with your accountant and financial adviser to review your investment accounts if this step becomes necessary.