Photo by f-oxymoron — Slide 1 of 7
It’s been a tough couple of years for job seekers. Despite some recent improvement in the hiring outlook, the unemployment rate is still hovering near 9 percent and good jobs simply aren’t materializing for millions of people. Worse yet, despite several extensions, people are starting to run out of unemployment benefits — which last a maximum of 99 weeks in most cases. (If you’re bad at math, that’s nearly two years.) In fact, 3.9 million Americans ran out of unemployment benefits last year, according to the National Employment Law Project, and the White House estimates that another 4 million will hit the benefit-free bricks this year.
If you’re collecting unemployment now, you need to plan for how you’ll get by if you don’t have a new job by the time your benefits run out. Even if you have a job, you must be wondering what all these people who ran out of benefits are doing for money. Where are they living? How are they buying basic necessities?
The answers may surprise you (or not), because they really vary from person to person. The news isn’t all bad. One person’s unemployment nightmare is another person’s business opportunity. The following are four stories from the trenches.
Photo by Cia de foto — Slide 2 of 7
“I had to move in with friends.”
Kay, 53, has been unemployed since mid-2009, when she lost her job with a landscape company. Unfortunately, she was already having money troubles at the time, and had recently lost her truck when she fell behind on payments. Once she was jobless, she was eventually evicted from her home, and has been living with friends ever since. She had to leave most of her things behind because, without a vehicle, she had no way to move them. “When you don’t have a truck, you can’t pack up your furniture,” she says.
She’s been making ends meet by selling off her collection of vintage jewelry, along with handmade jewelry and crocheted hats that she made last year. “After a while, when job searching doesn’t bring any results, you feel you need to do something with your time, and I discovered Etsy,” she says.
She’s held numerous jobs in the past and has been surprised by her inability to find something this time around. “I’ve worked in the restaurant business, customer service, I have computer skills, and I can type,” she says. She’s still looking for work, but the hunt has been complicated by her lack of a car. “I probably should’ve prioritized my vehicle payment over my housing payment,” she says. “Because ultimately I lost my home anyway. Looking back, if I’d had transportation, I think I would’ve had a better chance of getting a job.”
Photo by elle brown — Slide 3 of 7
“I started my own business, but it’s not making money yet.”
When Andrew Hersch, 26, was laid off last year, he took the opportunity to strike out on his own. He launched bTreated.com, a website that links users with last-minute discounts at local spas and salons. The idea’s origin? “During my unemployment, my regular haircut place was too expensive,” he says. “I wanted to fill whatever unfilled times they had available at a discount.”
Unfortunately, his dream required him to join a special New York unemployment program — otherwise, he’d have lost his unemployment benefits once he started a business, even if it wasn’t making any money. Under that program, he received six months of unemployment but none of the Obama extensions — so his checks stopped in December.
Now he’s living off his savings and hoping his company starts paying off soon. “Luckily I saved enough money beforehand, but six months isn’t enough time to start a business and really see any income from it,” he says. “I’m obviously not living extravagantly. I’m from California originally, so if I can’t pay the rent then I guess I’ll go back there. I could sell my furniture and buy a flight home.”
Photo by Peasap — Slide 4 of 7
“I pared down my expenses to $1,000 a month, including my mortgage.”
Leslie Jacobs, 51, was laid off in 2008 and ran out of unemployment benefits last summer. After she lost her job, she did what everyone should do (but doesn’t) — whittled her expenses down to the bone. She stopped going out to eat, for instance, and she stopped buying new things. She doesn’t get premium cable channels and she hasn’t traveled anywhere in two years. “You don’t do a lot,” she says. “When my best friend got laid off, she’d call me every day and say, ‘What are we going to do?’ And I’d say, ‘Nothing, that’s how you save money.’”
Now she’s living on savings, which she’s stretching as far as she can while she applies for job after job after job. “I applied for a secretary position for $35,000,” she says. “I have a master’s degree and I couldn’t even get that.” She’s concerned because she’s spending savings now that she’d hoped to have in retirement, and retirement isn’t so many years away for her. In the meantime, she’s trying to make a home organizing business grow at LesMess.com, and although the demand for home organization isn’t all that great in this economy, she’s also started speaking to women’s groups and churches and schools about organization.
In her mind, you take cash where you can get it. “If you really need the money, you’re going to have to take the $10-an-hour job after your benefits end,” she says. “But maybe negotiate for $10.50 or $11. Everything is negotiable.”