Stephanie was generous enough to write a 3-part story on her recent experience with being laid-off, how she’s managing to stay within a budget, and how she’s learning to thrive in her new unemployed status.
Stephanie Morillo is a musician and writer from New York City. While she has recently been displaced in the 9-5 sense, she has recently shown a knack for web programming and has been performing regularly in NYC. Stephanie can be found on her website and on Twitter @radiomorillo. Below is the 2nd post in her 3 part series (see the 1st post).
“In my last post, I discussed a few things that I did leading up to my last day at work including scheduling last-minute doctor’s appointments and health insurance, networking, and leaving a lasting impression with my employer. In this post, I will discuss getting my finances in order with a new (and substantially lower) income.
Approximately two weeks after I filed my first claim, I started receiving unemployment insurance (take a look at your state’s department of labor website to find out how to file a claim). One’s unemployment benefits depend on how long one was employed and one’s salary; I also elected to have the state automatically withhold taxes from my payments (it avoids having to deal with it later).
Budgeting on Unemployment
Chances are if you are reading this blog, you are already savvier than most of your peers when it comes to budgeting and personal finance. While my income changed, my bills did not. I had to figure out how to create a budget that would allow me to cover my basic needs and essentials first and foremost, and allow me a little extra for savings.
I check my credit score often for free using credit karma (these are soft inquiries that don’t reflect negatively on your credit report) and checked again after I got laid off to make sure that I was doing as well – or not – as I thought I did. if you haven’t already received your free, annual credit reports from the three credit bureaus, do so at annualcreditreport.com.
Everyone budgets differently; I decided to go with Learnvest’s free budgeting tool which automatically adjusts my income and what I use my money for. I adjusted my budget to reflect my new monthly income. The program also buckets your finances into different categories to help you prioritize your essentials, rent, utilities, transportation, health costs, credit card payments, loan payments, savings, retirement, entertainment, beauty, etc.
In addition, they have a nifty tool that allows you to see how much you have in assets versus your debt to show you your actual net worth.
The difference an extra $10 while on a reduced income is substantial and for that reason my savings and Roth IRA contributions weren’t going to be anywhere near as impressive as they were, but I’ve continued to save ($30 a week) and contribute to my Roth IRA (only $5 a week). It keeps the habit of saving going and my savings and Roth IRA accounts continue to accrue interest – to my benefit.
Lifestyle On a Budget
The irony of life is, while I was employed, I used to own a pre-paid smartphone that had unlimited minutes, texts, and data in the US (Boost Mobile). I had made the switch about a month before getting laid off to a contract provider which almost doubled my phone bill, but I elected to go on a family plan with my fiancé. If being on a contract proves too much for your budget, look into providers such as boost mobile (which runs on the sprint nationwide network), MetroPCS, Virgin Mobile, and any other regional providers. I owned a pretty decent Android smartphone through Boost, and my phone bill was only $55 (and the bill goes down $5 every six months you pay on time, until you only owe $40 a month!). Pretty nifty.
Anna is pretty daring in my book because she cuts her own hair. In New York City and in other cities around the country there are a host of beauty schools and salons that offer free haircuts or haircuts at a ridiculously discounted price ($5 haircut anyone)? I’ve shamelessly been a hair model for a high-end salon in New York City twice and in exchange for stylists practicing their craft, I get a free trim and style that would cost someone $150 – $200 at the same salon!
A number of no-contract gyms offering memberships as little as $10 a month have popped up around the country. I don’t particularly like the gym so another alternative I’ve found is running at the local park. Running may not be everyone’s favorite activity – but what about running to a story that has you being chased by zombies? I discovered the iPhone app called Zombies, Run! by chance and I love it. You can set a playlist and the storyline has different “missions” for you to follow. You’ll want to run just to know what happens next.
There is also a great FREE Nike Training Club app that offers amazing, killer workouts at all levels ranging from 30 minutes to 45 minutes, and they even have 15 minute workouts to help you target specific areas. They have cool rewards to keep you motivated – after working out for a total of 90 minutes (2 separate workouts), I unlocked smoothie recipes created for workouts. They also have celebrity workouts which feature some amazing Olympic talent like Hope Solo, Shawn Johnson and Allyson Felix, and if you are ever in NYC, visit Niketown on Mondays for a Nike training club workout with other women.
Deal of the Day
Needless to say, I try to go out with my fiancé as much as I can, though he understands I am on a super tight budget. Deal-of-the-day websites such as Groupon and Living Social have helped me to no end in getting a nice, really inexpensive dinner out or some other activity. It’s worth taking a look at if you live in a city!”
Have you gone through an unexpected unemployment? How have you made the most of it? What did you learn the hard way?
image by helga weber