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Surviving Unemployment

When you file for unemployment and see how much the weekly payout is to your account, two exclamations will probably escape your lips: “At least some money is coming in,” and “There is no way that amount will cover my expenses.” Well, since the government is not going to put any more money into your account, and since the average term of unemployment is almost 40 weeks, you need to cut your expenses to the bone, and you need to do it now. Otherwise, you might find yourself with empty accounts and no roof over your head. Here are some programs and some cost-cutting tips that really make a difference.


Foreclosure Prevention


If you’ve been unemployed for a while already, find out if your state participates in a Hardest Hit program. North Carolina has a foreclosure prevention fund. The Mortgage Payment Program (MPP) offers a zero-percent-interest, ten-year loan “to borrowers who, through no fault of their own, are financially unable to make their mortgage payment because of a job loss, reduced income, or other program-eligible hardship since January 1, 2008.”


This is an interest-free, forgivable loan to either bring your mortgage current or to pay your mortgage while you look for a job or attend training. If you continue to own and live on the property as your primary residence, the loan is forgiven at a rate of 20% per year starting in year six. They have another program for second mortgages.


The application paperwork is involved but not impossible. After detailing your work history and explaining the means by which you became unemployed, you’ll need to scan and upload several supporting documents. You will need a copy of your tax return, tax documents from the county, a print out of your mortgage payment history, bank statements, and a credit report—everyone is entitled to one free credit report from each agency (TransUnion, Experian, and Equifax) a year. Use this link: https://www.annualcreditreport.com/cra/index.jsp


You will need your deed, your appraisal, and other documents obtained at your closing. If you can’t remember where you put all that stuff, go to the office of the attorney that did your closing. He or she should have your documents on file. In addition, you will have to download, sign, and scan some MPP documents.


Refinancing and Deferment


Depending on your credit, interest rates for home and car loans are hovering near four percent right now. I was paying six percent on my car loan. I went to a private bank to pay off the remaining balance of my car loan held by the credit union. I extended the payments to reduce my monthly bill from $220 to $77. My significant other refinanced her car and used the equity to pay off a personal loan she had charging her 14 percent interest. Her new car loan is at an interest rate of 4.35 instead of 7.75 she was paying, saving her $70.00 a month.

The William D. Ford Direct Loan program offers unemployment deferments on student loans where no interest accrues. If for some reason your student loans are consolidated and in the hands of a private lender charging obscene interest rates, Direct Loans will buy back the loan. Put your student loans back in the hands of the federal government, and you will have reasonable interest rates, the option of graduated repayment plans, and a variety of forbearance and deferment periods for when unforeseen economic hardships arise. There are some organizations out there that charge you money to help you negotiate the buy-back process. You don’t need them. Use this link: http://www.direct.ed.gov/callus.html

Insurance and Electric Bills

There is usually a discount available when both your automobile and homeowners' insurance is provided by the same company. Also, my significant other and I recently combined our auto insurance policies to save about $33.00 a month. Little maneuvers like these add up.

See if your power company participates in budget billing. This is when they average your usage from the previous year and come up with a standard amount to charge you per month. If after 12 months your power usage was less than what was averaged out, you will get a refund for the difference.


Credit Cards


Banks and credit card companies are just as cash strapped as everyone else. Some are shooting themselves in the foot by charging additional fees, and some are offering credit cards at zero percent interest for six months—sometimes a year. First, call up your credit card company and ask for a better rate. If that doesn’t work, find a new card that is right for you and make sure it offers rewards points for purchases. Consolidate your cards and transfer your balance. With banks in a competitive scramble for customers, certainly, you can find one with no service charge on checking accounts and that requires no minimum balance. RBC Bank offers both fee-free checking and an interest-free credit card.


Miscellaneous Expenditures


Obviously, with gas prices where they are, you want to limit your driving. You might want to trade your five-dollar coffee for Folgers and your mail-order movie service for Red Box.

Your cable company has specials going on all the time that they do not promote and thus you have to ask about. With sites like Hulu that enable you to watch past episodes of your favorite shows, do you really need a DVR? Many networks will rerun the prior week’s episode in the days leading up to the new one.


Be creative and brutally honest with yourself. I have a storage facility costing me $75.00 a month. The conclusion I reached was that I really don’t need that stuff. Why pay to store things on which I could make a few bucks? A tag sale is imminent. What doesn’t go at the tag sale will be put up for bidding via social media.

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