Being unemployed carries a heavy weight of financial stress.
When you don’t know when your next paycheck will come, you’re left to pay all your expenses with whatever’s sitting in the bank. Often, it’s not enough.
And with the Labor of Bureau of Statistics’ latest report showing the US shedding jobs in July, you may be feeling even more stressed if you’ve recently lost your job.
We’ve rounded up 10 ways to cut costs and save so you can make your money stretch while you’re unemployed.
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1. Set Up a Bare-Bones Budget
Now’s the time to transition to a bare-bones budget that prioritizes only essential spending, like your rent or mortgage, utilities and groceries. Consider this an opportunity to try out Rocket Money’s budgeting app. Its free tier includes a subscription-tracking feature to discover subscriptions you no longer use or at least can pause while you’re out of work. Any money you can save now can be put toward essential expenses.
2. Move Your Emergency Fund to a High-Yield Savings Account
If you have an emergency fund, this may be the time to tap it. But it could also be a good time to move your money to a high-yield savings account to help you earn more interest on the money you have. The best banks offer bonuses and promotions for opening a new account, which could give you a little extra money to pad your emergency fund.
3. Ask for Help
Don’t dismiss the idea that your lenders and service providers may be able to help you through this tough financial patch. Many credit card companies have hardship programs that can lower your monthly payments or waive fees. Contact your creditors and bill collectors to see what assistance they can help you with. Just be sure you understand what’s required to catch up on payments.
If you’re struggling to cover even essential expenses like food and shelter, check out these resources to help you during a crisis.
4. Take Advantage of No Commute
Not driving to and from work has its benefits. Contact your car insurance company to see if you can lower your premiums now that you’re driving a lot less. Better yet, use this time to compare insurance rates with Insurify, which could save you hundreds of dollars.
5. Opt for a Cheaper Cell Phone Plan
Having reliable phone service is essential when you’re applying for jobs, but that doesn’t mean you have to overpay. You can get a cheap cell phone plan for $5 to $65/month.
6. Be Strategic About Your Grocery Shopping
Saving money amid inflated food prices is tough even when you have a job, so now’s the time to get strategic. Plan out your meals and stick to your list to nix impulse shopping at the grocery store. Try to limit the frequency of your grocery trips to no more than once a week. Center your meals around what’s on sale and shop generic. When you do need to shop, use a savings app like Upside to help you earn cash back on everyday purchases like groceries and gas.
7. Pay for Purchases in Cash or Take Advantage of a 0% APR Offer
A cash envelope system will keep you from going over your budget. Take only enough cash you can afford to spend when you’re out shopping, and leave the debit and credit cards at home.
But there are a lot of times using cash isn’t even an option, so consider applying for a 0% APR credit card. Use the introductory period (typically 12 to 21 months) to avoid interest on purchases while you’re job searching. But make sure you have a plan to pay off the card before the intro period ends to avoid getting socked with interest.
8. Make Extra Money While You’re Job Hunting
When you’re unemployed, it’s easy to panic about money and take the first job you’re offered. And while that may make sense in some situations, one way to avoid taking a job you’ll regret later is by giving yourself a financial cushion. Taking on a part-time job driving for DoorDash or Uber can let you earn extra income to cover essential expenses while you’re plotting your next career move.
9. Get Free Goods and Services From Neighbors
When you’re working with a tight budget, anything you can get for free is welcome. Buy Nothing groups, Nextdoor and Craigslist are three platforms where neighbors offer up free items. For more ways to save, check out The Penny Hoarder’s comprehensive guide to saving money.
10. Entertain Yourself Without Spending Money
Life on a bare-bones budget doesn’t have to mean absolutely no fun. This list of 100 free things to do will give you ideas for when you need a break from applying to jobs all day.
Tiffany Wendeln Connors is senior managing editor at The Penny Hoarder and a Certified Educator in Personal Finance. Former senior writer Nicole Dow contributed to this report.
