With the threat of a double dip recession on the horizon I’ve had many friends ask how to function in a financially efficient manner due to the recent loss of a job.  I often refer to this as “Safe Mode”.  The Windows PC types probably know this as the moment your computer may crash so it operate using only the essentials.

This should be your goal if you recently lost or are about to lose a job with nary an emergency fund in site.

First you should have a family meeting to get on the same page about the following cuts that will need to be made.  Don’t come up with a plan and put it in place without helping each member of your family understand the rationale.  This helps to ease the shock while engendering a team spirit about how you will get through this together.  If you’re single, skip this part.

Downsizing:  Different Strokes for Different Folks

What you do in this area depends on if you’re single, married and if married, how many children you have.  If you’re single and currently renting an apartment then downsize to renting a room, getting a roommate or even a studio.  This may also work if you’re a couple with no children.

If you have young children then you may want to downsize to where the children share a room in a 2BR or they share a space in a 1BR.

If you have older children then they may need to share a bedroom with you, the parent or share a space in the living room/dining room areas.

And, before you write and tell me how your kids need space to run and play, don’t.  We’re discussing the need to stay above the recession tide and your kids having a space to run and play in the house isn’t  priority at this stage in the game.  This especially applies if you have very young children.  They do not need their own bedroom. This isn’t about keeping up appearances to your children or family.  This is about saving money and being able to literally keep food on the table.This is often a very uncomfortable reality for many but the sooner you embrace it the sooner you will move past it and understand that this is only temporary.

Finding Work

If you don’t have a FT job, you can get a job at a supermarket, library, fast food place etc.  I often get the screw face when I tell folks this as if the money isn’t just as green.  Get over it.  While in grad school I walked dogs for a living and went on several mystery shopping trips during the week because I wanted to have my own money coming into our household.  Right now, no job is beneath you unless it is just morally unacceptable.

Until you get back on your feet, get in where you fit in.  Walk dogs, pick up trash, do someone’s laundry, babysit, start a business – there are endless options for bringing in money.  Many people are out of work and your perfect job may not be there right now.  Until then, take what you can get and rebuild little by little.

What Should I Cut From My Budget?

This will largely depend on your streams of income.  How much, how often etc etc

• Eating out-You should under no circumstances be eating out if you’ve lost your job and have no income coming into your hands.  Eating out would be a no no as you should be sticking to eating at home on a low budget.  Try Aldi as a great alternative to high priced supermarket brands:
• Food budget basics include:
• Water
• Lemons/Lime (flavor the water or lemonade)
• Rice
• Canned food: soups, beans, peas, veggies etc
• Pasta: Ramen Noodles, regular pasta
• Bread
• Chicken
• Ground turkey (very versatile)
• No red meat, too expensive
• Hair salon-Do I really need to explain this?  Get a hair dryer and your favorite shampoo/conditioner and make it work!  Youtube gurus offer up a lot of advice around how to style your hair sans salon visit.
• Cell phone-This is tricky.  My advice here is if you have a laptop and regular access to WIFI (local library, Panera Bread, McDonalds) then you don’t need a cell phone.  With the advent of Google Voice and Skype, you can easily make phone calls to prospective employers.  If you have to have a cell phone then Safe Link may be an option as this is available to those who are already in Food Stamps or Medicaid.
• Car-I would give this up if you live in a fairly “metro-friendly” area.  If you have access to buses and subways then give up the car.  There’s expenses like gas, insurance, repairs and/or a car note that you don’t absolutely need right now.  Sell it and relieve yourself of the monthly expense.  Opt for a bike share or using a service like ZipCar when necessary.
• Makeup/Hair Supplies-You’d be surprised what you can go without when you’re dead broke.  I know some of you must have your make up and hair but I won’t tell you yes on this one.  Mascara, eyeliner and lip gloss sure.  But a full run at the Mac counter?  Nope.
• Health care-If you need to go to the doctor and can’t afford health insurance, a federally funded health center is a great option.  This is often missed when discussing alternatives to health insurance so take a look here:
• You pay what you can afford, based on your income. Health centers provide
  1. checkups when you’re well
  2. treatment when you’re sick
  3. complete care when you’re pregnant
  4. immunizations and checkups for your children
  5. dental care and prescription drugs for your family
  6. mental health and substance abuse care if you need it

Cut Everything, But Need Help Making Ends Meet?

Check with your local social service agency and related nonprofits in your area.  There’s a program called TANF-Temporary (cash) Assistance for Needy Families which gives cash assistance to families with children based on income. Check your state for income guidelines.

There are other food banks like ShareDC.org which gives families 2 bags of groceries for $23 or free if you volunteer for 2-4 hours with their organization.

Check with local clergy for cash and food assistance.  They can also be a good source for referrals in the area around social service needs.

Check your budget to determine what you may be hiding.  Often times we gloss over things we would never dare cut but when we’re operating in emergency mode, those budget items need a 2nd look.

Credit?  Should I Pay Creditors

If you can afford to do so, yes, pay the very minimums to save your credit.  Call your creditors and explain your situation and they may be able to work out a plan with you.  If you can get on the disability payments which pay your premium if you lose your job then do so. Ask your creditor if this is available before you tell them you can’t pay.  Get on that plan, usually pennies ($1.67?) per month which they add to your balance.

However, if you have to choose between eating/shelter and paying a bank, then I choose eating and shelter.  The bank will be fine until you get back on your feet.

This is a scary time for many people due to the sputtering economy.  It’s time to buckle down and spend only what is absolutely necessary.  Take a look at your budget and determine what is critically essential to your well being.  That would be food, shelter and access to health care should you need it.

How do you/would you function when in safe mode?  What would you cut?  What would you keep?