Being out of work for a long time can be tough, especially when it comes to money. But a little planning can go a long way.
Start by figuring out exactly what you have and where your money goes each month. Then look for ways to cut back and make your savings last. It might mean adjusting your budget and lifestyle. But taking control of your finances now will help you get through this period with less worry and more peace of mind.
Take stock of what you have
Your current financial situation is your starting point. You need to know:
- How much money you have access to in your bank account(s)
- How much you spend each month and where it goes
- What you receive (or can expect to receive) from Employment Insurance (EI) and for how long
If you know exactly what comes in, what goes out, and where it goes each month, you’ll know how to prioritize your spending and where you can cut costs.
If you have savings
You’ve saved for a moment like this. With no idea of how long you could be out of work, it’s time to prepare for the possibility of long-term unemployment.
Create a conservative monthly budget and adjust your lifestyle to fit it. Set spending limits and stretch your safety net—not your budget.
If unemployment lasts longer than expected, you may need to tighten your budget to make your savings last.
If you’ve been living paycheque to paycheque
Don’t beat yourself up if you don’t have savings. Focus on what you can control now, which is handling your expenses.
Without a steady income, you may need to cut back a lot and reach out regularly for support. You can do this.
Remember, this is temporary. Things will get better when you find work.
Apply for financial and other supports
You’re not alone in working to make ends meet. There are supports available to help you get by. Research your options, ask questions, and then apply for everything you think you might qualify for:
- Employment Insurance—Apply right away, even if you’re not sure you qualify.
- Income Support (Government of Alberta)—This gives you help with essentials like food, clothing, shelter, and utility bills.
- Benefits Finder (Government of Canada)—This tool can help you identify federal and provincial benefits.
- Food banks, including in Edmonton, Red Deer, and Calgary—Register for access to food hampers.
- Money Mentors—Access free financial planning services for budgeting and debt consolidation.
Reduce your monthly expenses
Long-term unemployment means you might have to do without some things you enjoyed when you had a steady income. Here are a few cost-cutting tips to reduce your monthly expenses:
- Take in a roommate or two to share rent or mortgage, and utility costs.
- Make meals and coffee at home.
- Drink water—it’s nearly free.
- Plan meals ahead and buy only what you need.
- Use apps like Flipp to find local grocery deals.
- Most grocery, drug, and pet stores advertise discount days. Shop then.
- Use up what’s in your fridge and pantry before it spoils.
- Borrow books, movies, and more from the library instead of buying your own.
- Cancel subscriptions you don’t need, like streaming services and meal delivery.
- Switch to a lower-cost cell phone plan.
- Apply for a low-income recreation pass through municipal fee assistance programs instead of paying a gym membership.
- Park your car and apply for a low-income public transit pass offered through municipal fee assistance programs.
- Consider downgrading your car insurance coverage, if possible, while you’re not driving your car.
- Learn DIY skills from YouTube to be more self-reliant. To save money, repair things instead of replacing them.
- Buy things you need by cashing in loyalty rewards.
- Scan online marketplace sites for free stuff. New items appear all the time.
Bring in some additional income
While you look for full-time employment or work to upskill you can probably earn extra money. Just be aware of how extra income could affect the social supports you’re receiving. Most are calculated based on your income.
Here are some flexible gig opportunities that could work for you:
- Drive for services like Uber or Skip the Dishes.
- Become a personal shopper.
- Offer child care or pet walking/sitting.
- Do yard maintenance or snow removal.
- Sell used goods online.
- Create homemade goods, for sale on Etsy.
- Trade services through bartering.
Tap into family supports
Whether you borrow money from family or lean on them for other kinds of support, turning to your loved ones can feel like a lifeline when other options aren’t available.
Before you do this, think it through carefully. While turning to family help can ease financial stress, it also comes with some challenges that are worth considering.
Advantages of tapping into family supports
- Quick access to funds—Unlike formal loans, family assistance is often faster and more flexible, without long applications or credit checks.
- Lower or no interest—Borrowing from family may save you money in interest payments compared to taking out a high-interest loan.
- Emotional support—Family members might offer not only financial help, but also emotional support during tough times.
- Easy repayment terms—You might be able to decide on repayment plans that work for you both, which eases stress.
Challenges to consider
- Relationship stress—Money can strain relationships if it isn’t clear about how and when you’ll repay.
- Guilt and shame—If you struggle to repay the loan you may feel embarrassed.
- Financial strain—If the lender is not financially stable but feels obliged to help, they might face their own financial issues.
- Recurring asks—Borrowing from someone can lead to repeat requests, leading to tension in the relationship.
- Judgement—Family gatherings or social events might feel awkward if there’s unresolved debt and a sense that you aren’t trying to repay.
How to minimize risks
- Talk openly—Be clear about how much you need, why you need it, and when you plan to repay.
- Set clear terms—Put the repayment agreement in writing to make sure you both understand.
- Respect boundaries—Accept a “no” gracefully if a family member cannot or does not want to help.
- Be proactive—Show your family that you’re trying hard to find work. This shows you’re relying as much on yourself as you are on them.
By approaching family assistance with care and mutual respect, you can preserve relationships while navigating financial challenges.
Avoid corporate “pay later” solutions
It’s tempting to borrow against the future when money is tight. But quick-fix options often come with high costs.
Credit cards
Interest rates on credit card debt are typically high. You’ll likely owe far more in the long run than the value you see up front by taking a cash advance or buying things on credit. Save your credit card for emergency purchases only.
Cash advance loans
When money is tight the local money lender might seem like a good option. But their lending rates are some of the highest in the country. They’ll take a massive chunk of your tax return or any expected payout you have coming. That’s money you could use so don’t lose it in haste.
No money-down offers
Big ticket “no payment—no interest” items may seem appealing. Lots of big box stores offer deferred payment incentives. But they’re a good deal only if you can pay off the full amount before the end of the promotion period. Interest kicks in if you can’t pay on time, and it can be comparable to credit card interest.
You will get through this
Getting through long-term unemployment isn’t easy, but every small step helps. Stay focused on what you can control, use the resources you have, and try to keep a positive outlook. This rough patch won’t last forever, and the smart choices you make now will help set you up for success when the right job comes along.