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With the unemployment rate hovering at 9.5% and 80.4% of the nation’s 78.4 million families with at least one unemployed family member, it would be wise for us all to recognize that there is no such thing as true job security. Many of us find ourselves out of a job having been gainfully employed for years. After the shock settles in, it’s important to accept that it could be a while before you find work again.

Until the next job comes along, it’s crucial to maintain a positive outlook and manage your finances accordingly, as money has stopped coming in the door, but will still need to go out (bills, groceries, rent/mortgage). Managing your finances during this troubling time is bound to be challenging so here are seven solid pointers:

Have an Emergency Fund –

Always have an emergency fund. This way, if you ever lose your job and therefore, your primary source of income, you will have a cushion. Generally, it is recommended to save enough money to cover your living expenses for at least three months; however, in this type of economy where job layoffs are increasing and the labor market continues to tighten, you should probably save closer to six months of living expenses. Although it requires discipline to set aside money when you are making it, these funds will be critical if not integral during your period of unemployment.

Think About Taking a Loan –

This is only advisable if you are certain that your savings is not enough, if you have good credit and can obtain a low interest rate loan, and are not currently burdened with a lot of debt. If you own a home and are lucky enough to have some equity in it, think about a home equity loan. Even if you find a job quickly, you can pay back what you have not used (be sure to inquire about prepayment penalties).

Adjust Your Living Situation Accordingly –

Sure, it’s completely understandable if you have two kids, a significant other and a cat, to not want to invite someone into your home to share the expenses. However, if you are living alone, bringing a roommate into the picture could help your financial situation. A roommate can cut your rent in half or help contribute to your mortgage and bills, taking a large burden off your shoulder. Structure the roommate’s lease as you see fit, but remember finding a job in this economy is a long-term process. If you cannot bear to live with someone and are renting, consider moving to a less expensive place. You might lose your security deposit for breaking the lease early so weigh that cost vs. the rent you will be saving by moving.

Determine How You Are Spending Your Money –

When you have a reliable source of income, it is easy to ignore where and how you are spending money. You know that your major expenses are covered and that another paycheck is coming soon. Now is a good time to really examine how you spend your money. This can be done by accumulating all your receipts during a two week or one month time and begin to budget accordingly. This is a prime example of when online budget tools can be a good friend.

See Where You Can Cut Back –

Since cash flow is tight, if existent, you will have to cut back on expenses. Develop a budget that eliminates unnecessary expenses and be rational. If you were getting a manicure and pedicure once a week before you lost your job, cut it back to once a month, if at all. These expenses add up and could be used for other, more necessary items such as food. Look for inexpensive alternatives for the things you enjoy. Additionally, this is not the time for major purchases such as a car or flat screen TV.

Take Advantage of Available Programs –

If you have been laid off, look into unemployment insurance. Additionally, try to negotiate a severance package with your employer before officially leaving. Although it might not be large, any little bit of severance can help. Finally, the government has created programs such as the home loan modification program which help people who have had a loss of income and/or cannot afford their current mortgages, yet want to stay in their home. This can be a time consuming and lengthy process but could save you money and heartache in the long-term.

Find Part-Time Work –

You will only be able to stretch your savings so far. Although you might not want waitressing or bartending to be your career, it could help you get by in the interim. Alternatively, contact local temporary agencies to determine whether there is contract or part-time work available in your field of interest. Always remember that your main goal should be to obtain a new job so you should not be working so much on the side that you lose sight of this.

As scary as being out of work sounds, it is much better to know how to manage your finances during a time when there are so many other variables. Additionally, curbing your spending habits coupled with gaining knowledge about your personal finances could be a good thing no matter what – employed or unemployed!

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