What to Do When You’re Broke and Unemployed

What To Do When You're Broke and Unemployed

When you are broke and unemployed, your initial reaction is usually to ignore the problem and run away from your creditors. However, did you know that avoiding your financial problems can only worsen the situation?

Instead of just wallowing in your situation, you need to take action. This way, you can reduce the financial fallout for you to recover as fast as possible once you finally secure a new job.

Here are a few tips on what to do when you’re broke and unemployed:

Go Through Your Budget and Cut Back on Your Expenses

When you are broke and jobless, one of the very first steps you need to take is to be honest in revisiting your budget. If you don’t have very little or no money at all coming in, you have to reduce the money that goes out.

It means you need to cut any unnecessary expenses. Cancel those additional cable packages, streaming services, subscriptions, eating out, and other services you usually pay for when you can actually do them on yourself. These include cleaning, personal care, pool care, and landscaping services.

You can also find other areas where you can cut back. Check your bills such as your internet and phone bills to see if you are paying for some features you don’t really need. You could downgrade to a package that suits your budget better. You can also check your necessary expenses such as groceries to know if you can further reduce their costs.

All of these efforts may feel useless if there is no money that comes in. However, by cutting back more today, you can be sure that you won’t be paying off once you secure a new job.

Make Arrangements with Your Lenders

See to it that you get in touch with all of your lenders and inform them of your situation. You might also want to inquire if they have available options that might help you. Never try to hide from you collectors and treat them as lenders. If you don’t make payments and you don’t get in touch with them, you might be likely written off as loss, resulting to you facing repossession and collection threats.

You have to be proactive instead and contact your creditors to tell them what is happening. They won’t send you to collections right away because you informed them of your income challenges. In worst case scenarios, they will inform you that you still need to repay your loan and there is nothing they can do about it. However, more often than, they can stop or reduce your repayments, which can take some burden off your shoulders.

Contact Your Mortgage Provider Right Away


If you are broke and unemployed and you happen to be paying your mortgage, your main problem is probably making sure that your mortgage stays current. The worst that could happen if you default on your credit card is being taken to civil court. But, a default on mortgage may mean that your lender might start some foreclosure actions that might make you lose the house.

The good thing here is that most mortgage lenders in general want to stay away from the potential losses and expense they face during foreclosure. This means that they will be more willing to sort things out with you to ensure that you don’t default. It is especially true when you call them early o before you start missing out on your payments.

It is rather common for most mortgage lenders to grant homeowners with forbearance. This is where they temporarily stop or reduce your payments every month while you are on the process of getting back on your feet. It can save you from the stress of losing your house and reduce the bills you need to worry about.

Be Careful When Choosing Lending Options

When searching for ways to ensure that you stay afloat during your unemployment period, you might consider some financial solutions that offer cash. Securing funds to help you stay out of the red for several months might seem like a no-brainer.

But, there are several important points you need to consider before getting a loan that you might not have any means to repay. These include the time you have before you should start paying the new loan. Check if that time is enough for you to look for a new full-time job.

Know how much your new loan will increase your financial and what you will need to put at risk when you take out the funds. Determine how much the new loan is going to cost you as well as when you should pick up the tab.

Look for Ways to Earn Extra Cash While Searching for Full-Time Employment

There are a lot of possible options that you could use and try for supplementing your income during your search for your new full-time job. These can include side gigs and freelance work. Remember that these stop-gap measures are only temporary. You might need at least several forms of income to cover your necessities and bills until you land a full-time position.

Some options you can consider include the following:

  • Look for a freelance work in different platforms, especially if you happen to be a creative professional like a graphic designer.
  • Check if you got some stuff you can sell to earn some money like old electronic devices or clothing.
  • Find some side gigs like signing up as a delivery driver or an Uber driver, for example.
  • Apply for a part-time job in hospitality or at the local retailer for you to earn income during your spare time when you are not job hunting.

Just because you are broke and unemployed doesn’t mean that you should stay there for a long time. Refuse to remain in your current situation. Follow the tips above to bounce back right on your feet slowly but surely and see the results of your effort.