If you are jobless, figure out what you owe, have and need

The Dallas Morning News (MCT) - Finding yourself unemployed can be frightening, as too many people are learning these days.

If you find yourself in that position, try to keep from panicking.

Your priority needs to be figuring out how to survive financially during what could be a long period looking for work.

It may not be easy, but you can make it through this difficult time financially if you take a systematic approach.

"Take a personal inventory," said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. "Consider all assets, income and expenses. Hopefully, you will not have to liquidate any assets to survive, but it is good to know what you have to fall back on."

_ Nothing is off-limits.

"If necessary, consider selling the second car, or any recreational vehicles, real estate holdings, rental properties or jewelry," Cunningham said.

After reviewing income vs. debt obligations, if there isn't enough money to make ends meet, calculate how much is needed to meet the basic household living expenses.

"Your goal is to pay everyone, but if you must make a choice, keep your home life stable by paying your rent or mortgage, utilities, child care, insurance premiums, health care, food and keeping gas in the car," Cunningham said.

Involve the whole family, including children, and cut out all unnecessary spending.

But as tempting as it may be, don't raid your 401(k).

"This is one of the most expensive mistakes you'll ever make," said Lynn Lawrance, a certified financial planner in Dallas. "In addition to paying taxes, it's really hard to make up for lost ground once you're re-employed."

_ Think of ways to save.

Marguerite Hansen, who lost her job as an assistant manager at a shoe retailer last October, aims to make her errands go a long way.

"I would make sure I would do everything in one day because it was expensive to buy gas," said Hansen of Grapevine, Texas, who is looking for an office management position. "I turn the heat way down in my apartment."

Hansen bought an insulated shade system to cover her patio door to block cold air from coming into her home.

"It has dramatically cut my electric bill," said Hansen, who estimates the cover has saved her $100 a month.

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She also visits her hairstylist less frequently, going every five to six weeks instead of every four.

Chad Blanscet was laid off from his job as a mortgage underwriter last October and was rehired in January as a contract worker in the same position.

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Although he received severance pay, his family had to made sacrifices. For example, they didn't eat out as often, and they paid down their credit cards.

"We rearranged some of our finances," said Blanscet, who has three sons, ages 8, 4 and 2. "If we had not done that, we probably would have been in dire straits.

"We started budgeting two weeks at a time and shopping for groceries two weeks at a time, and it saved about 40 percent on our grocery bills," he said.

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_ Keep your health insurance current.

A sudden catastrophic illness can be financially devastating for the unemployed, which is why it's so important to maintain health coverage.

You have several options:

If applicable, hop on your spouse's insurance plan. If you lose health coverage because of a job loss, it's considered a "qualifying event" under federal tax law, and your spouse would be able to enroll you and the family on his or her plan, said Wendy Nice Barnes, vice president of human resources at eHealthInsurance.com, a health insurance information Web site.

Take COBRA health coverage. COBRA is the acronym for a federal law that allows many laid-off workers to remain on an employer's group health plan for 18 months.

When you're covered by a group health insurance plan, your employer usually pays some or all of the premium. When you go on COBRA, you are usually required to pay the full premium on your own, plus a 2 percent administration fee.

However, under the newly adopted stimulus bill, the government will pick up 65 percent of the premium for the first nine months for qualified unemployed workers. To be eligible, you must meet all of these requirements:

_ You were laid off between Sept. 1, 2008, and Dec. 31 of this year.

_ Your individual or family income for this year does not exceed the cap. Eligibility begins to phase out at $125,000 for individuals and $250,000 for families, and stops at $145,000 for individuals and $290,000 for families.

_ You are not eligible for other group health coverage, such as on a spouse's plan or Medicare.

Get an individual health policy. If you're in good health and don't have any pre-existing medical conditions, you may be able to find less expensive options than COBRA.

The average COBRA premium costs 60 percent more than comparable individual coverage online, according to eHealthInsurance.com.

However, the Web site notes: "It's extremely difficult to qualify for an individual health insurance product if you have a pre-existing health condition like diabetes."

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Before you buy a policy, make sure it covers catastrophic illness.

_ Sign up for unemployment benefits.

It can take some time after you file for unemployment benefits to know if you qualify. So it's in your best interest to sign up immediately.

Your weekly benefit will depend on past wages and the length of time you worked in the past five quarters.

The stimulus package added $25 to weekly benefits, which won't show up until mid-March.

The stimulus plan also excludes the first $2,400 of jobless benefits received this year from federal income taxes. Currently all unemployment payments are taxed.

Regular unemployment insurance can last for up to 26 weeks, but recent extensions by Congress have added 20 weeks.

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© 2009, The Dallas Morning News.