How to lose $600 a week and still survive

Millions of people who depend on unemployment just lost $600 in wages per week. Here are some tips on how to cope with a massive income loss.

If you’re reading this from a place outside of the U.S., or from a different time (hello from the future!) you might think that the title of this post is oddly specific.

But in the U.S., millions of people who are receiving unemployment had been receiving an extra $600 a week due to the CARES Act, a response to the ongoing global pandemic.

And this benefit just expired.

For those who are sheltering in place, that’s a pretty heavy burden to bear.

If you doubt this, hopefully this post will convince you otherwise.

But for those dealing with this totally unnecessary crisis, here are some ways you can cope.

Why the $600 matters

The average weekly wage for someone on unemployment in the US is $378.

This of course varies by state and by circumstance. The more you made in your previous job, the more you’ll make in unemployment, at least up to a certain point.

But if we go with the average, when an extra $600 is added on, that becomes $978 a week.

Big difference.

Unemployment is not designed to be comfortable. It’s designed as a stopgap to get people working again.

And that’s great when there are jobs to be had and we’re not, you know, battling a global pandemic.

But it is my strong opinion that we should not be suggesting, incentivizing, or requiring that people return to work. It is not safe. It is no more safe now than it was in March. It will cause more suffering and death.

So back to that expired $600 a week. If we assume four weeks in a month for ease in calculating, this means that the average unemployed worker just had their wage slashed from $3912 to $1512.

Yikes.

That’s a 61% cut.

Most people can’t live on $1500 a month. Could you? How much is your rent or mortgage? How much you spend on food? How much is your car payment, or how much do you spent on gas or the bus?

(If you don’t know how much you are living on now, sign up for my mailing list and download my free IBE worksheet. It will help you better understand what you have.)

Tips for surviving

So if all you have is $1500 coming in, and your expenses are more than that, what do you do?

  1. Don’t get out the credit card. I know this may be your first impulse, but resist it. Emergencies are the worst times to use credit cards. After you build up a bunch of debt, you’ll have two emergencies.
  2. Make a list. If you haven’t already, make a list of everything you have going on. What are you paying for? Look at your bank statement if you need to. Account for everything.
  3. Find your savings. Do you have savings? If so, it’s time to use it. Don’t cash out your 401(k) or anything like that, but find whatever money you have and get ready to put it to work.
  4. Cut the fat. Does everything on that list absolutely need to be there? Seriously, this is crunch time. You can’t spend money on things you can’t afford. Get rid of everything that’s not necessary.
  5. Order the list. It’s clear that not everything is going to be able to be paid. So order things from most important to least important. What is most important? Food, shelter, utilities. What’s least important? Everything else.
  6. Pay the top first. Pay as much as you can from the most important bills you determined above. You stop when the money runs out.
  7. Negotiate with your creditors. Call up your credit card. Call up the place that has your car loan. Call your landlord. In all cases, ask to temporarily lower or postpone your payments. Try to broker a deal. Don’t let your pride get in the way here. The worst they can do is say no, but they might say yes. After all, these people can’t take blood from a stone.
  8. Don’t get out the credit card. I know I said this already, but continue to resist the impulse. I mean, if it’s that or having the lights go out on you, then fine, but it rarely comes to that.
  9. Look for assistance. Apply for SNAP benefits (that’s the food stamp program). Call on local food banks. Look up Medicaid or Social Security benefits, as you may qualify for those. Here’s a longer list.
  10. Ask for help. Talk to your community. Don’t be silent. The more you can reach out to others, the better off you’ll be. Work together. Share ideas. Advocate for each other.
  11. Breathe. This is scary, but you don’t have to panic. Panic won’t help anyway. You will find a way through this, even if you don’t see it yet.
READ MORE:  One day, you too may not receive a paycheck. Here's how to prepare.

Unnecessary suffering

I’m not an economist, but I sort of doubt that mass death and sickness is good for the economy.

Everyone should be staying home. There is a deadly pandemic out there, and it didn’t go away when summer began.

Yes, not everyone can stay home, but we should be incentivizing people to stay home whenever possible.

Yes it sucks. Yes it would be great if children could go to school.

But you know what sucks even worse? A child getting sick and bringing it home to her parents, who then give it to everyone they see at work.

I’m not an economist, but I sort of doubt that mass death and sickness is good for the economy.

Now, for the rest of you:

If you can help, donate to a food bank, either a local one like the Oregon Food Bank, or a national one like Feeding America.

If you know people who may be affected, reach out to them. Even just making contact can help people feel less alone.

In general, find people who need help, and help them.

We will get through this. Really. It’s just going to involve a lot more suffering than necessary, and by many people who can least afford it.

But please, take this one day at at time. Figure out your plan. It will be okay, eventually.

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