Advance America on How to Budget for Reduced Unemployment Benefits

LOS ANGELES, Aug. 27, 2020 /PRNewswire/ -- Millions of unemployed Americans have been receiving $600 a week in addition to their unemployment as part of the Federal Government's coronavirus relief efforts. Due to an executive order, people should still be receiving $300, with a potential additional $100 coming from state governments, but that still cuts recent benefits by as much as $1,200 a month.

For people affected by this recent decrease, here are some tips about how to make it through this difficult time.

If unemployment won't meet essential needs

More important than anything else is to keep a family clothed, fed, and housed. If any one of these three is in danger, it's time to see where there could be emergency money to help.

Reach out to debtors and landlords and try to negotiate a payment plan or lower rate due to unemployment. It's also possible to negotiate reoccurring bills like Internet and cell phone packages, especially when long-time customers can point out better rates from competitors.

Asking friends and family for money can also be an important — albeit difficult — step. People would often rather help than see their loved ones face dire circumstances. Some employers will also offer a paycheck advance, as long as it's not a reoccurring need.

Finally, research options for online installment loans. An installment loan is a great option for people who need a larger amount of cash quickly because the terms of the loan as well as the repayment plan are available upfront. That means it's easy for a borrower to figure out if and how they can repay the loan before taking the plunge.

If unemployment will stretch — with some budgeting

For those who have been making unemployment work with a little wiggle room, here are some budgeting tips for the social distancing era.

Spend some time on the weekends setting up a cost-efficient meal plan for the rest of the week. Luckily most places are no longer looking at the grocery shortage of a few months ago, meaning it's much easier to get stretchable staples like rice, beans, and pasta, so planning ahead can definitely pay off.

Check out what's available online from the local library — they likely have more audiobooks, TV shows and movies than they did five years ago. There are also lots of free educational tools available nowadays, such as learning to code with Codecademy or tackling a new language with Duolingo, so people can sharpen their skills for the job search.

A final tip is that people who are still spending the majority of their time indoors can probably chop their data plan down a lot if they're spending most of their cell phone hours connected to their home Wi-Fi.

If unemployment is still paying the bills with room to spare

For people who have a lower cost of living, whether due to their area, lifestyle or just not having kids, even reduced unemployment may be more than enough to make ends meet.

While it's great to have more than enough money, that still doesn't mean it's time to be throwing money away. Now would be a great time to prioritize building an emergency fund with three to six months' worth of expenses — or if that seems like too big of a target, even a cushion of $500 can help in an emergency.

With the next congressional relief bill still unclear, it's possible that even the $300 unemployment cushion could be cut, so it's best to be prepared for an uncertain economic future.

Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your current financial circumstances.

SOURCE Advance America