Financial Survival Tips for Laid Off Workers

In spite of indicators that the economy was in repair and ready to rebound as the year draws to a close, the number of unemployed Americans continued to rise into the fall of 2009. In September, the unemployment rate reached 9.8 percent, a 26-year high after a month that saw employers cut more than 260,000 jobs.

Though the unemployment rate does not mean reports of the economy's recovery are untrue, the recovery of the economy does not necessarily mean the job market is also recovering. Instead, federal stimulus programs, including the now defunct Cash for Clunkers, have helped the economy to rebound but done little for unemployment rates, which provide a glimpse into the sluggish nature of spending.

Perhaps most unsettling about the recession is the length of many people's unemployment. Of the 15.1 million unemployed Americans, 36 percent, or 5.4 million, have been without work for more than six months. What that illustrates is not only an especially harsh recession, but the need for the nation's recently laid off workers to plan for the worst case scenario with respect to the length of their unemployment. The following tips could help those recently laid off better survive their layoff.

* Consider freelancing. Though many people are skeptical of going off their unemployment benefits and freelancing, in certain instances freelancing can prove more fruitful than collecting unemployment. In fact, according to the U.S. Department of Labor, the average unemployment payment benefit, which varies based on an individual's salary, in the first quarter of this year was just $300 per week, meaning it's entirely possible freelancing could prove far more lucrative than simply filing for unemployment benefits.

In addition, because so many of the nation's workers have been laid off, many companies have increasingly looked to freelancers to deal with workloads that have not decreased simply because staff size has. That said, there is plenty of money to be made via freelance work, and those considering a career change can use the opportunity to freelance as a means to determining whether or not such a change is really for them.

* Keep money in the 401(k). Many people's 401(k) has hit rock bottom. Therefore, withdrawing money from the 401(k) now is cashing in on a bad investment. In addition, the fees associated with withdrawing from a 401(k) will only further deplete its already low value. Unless it's completely necessary, keep money in the 401(k).

* Apply for benefits immediately. Unemployment benefits tend to take a few weeks to process, so laid off workers should apply immediately after being laid off. It's also important to note that laid off employees who received severance packages are still immediately eligible for unemployment benefits.

But an unemployment check is not the only benefit for which laid off workers can apply. Depending on the industry in which you worked, subsidized training could be available via a government program called Trade Adjustment Assistance, which offers assistance to workers who have been laid off due to increased imports from, or outsourcing to, other countries.

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