While there have been numerous attempts to curb unemployment in the UK, one cannot deny that it’s still a serious issue in the region. That’s even more of a case now due to the recent global crisis. In fact, statistical data shows that the unemployment rate in the UK will reach its peak this 2022 after reaching an estimated 4.9 percent in 2021. (4) Of course, that’s not to say getting a job is impossible under these conditions.
Job opportunities are right around the corner, but it would take time before you can find the right employer. Now the question is, how do you manage until then? Read below to get five tips on how to budget when you’re unemployed
1. Save money on every opportunity
One of the many budgeting tips your friends would often give you is to track your expenses, but that applies to everyone, even those with a job. If you’re on a tight budget, not only should you track your expenses, you must also learn how to control them, ideally, by reducing spending as much as possible. One of the best ways of doing so is by saving money on every opportunity.
Here are some ways to save money as an unemployed individual:
- Downgrade or cut services you don’t need, such as streaming services or magazine subscriptions
- Refrain from getting take-outs. Cook your meals at home.
- Use coupons whenever you’re out grocery shopping.
- Don’t use your car to travel walkable distances.
- Take time to find the best deals when opting for a product or service.
Essentially, you want to focus more on your needs and not so much on your wants. By doing so, you can save money without sacrificing your basic needs.
2. Take steps to lower your utility bills
Utility bills will always be a huge part of your expenses, regardless of whether you’re living alone or with friends or family. Fortunately, your utility bill is the type of expense you can control. So, how to budget when you’re unemployed and have high utility bills for your capabilities? You can lower the expenses by starting with these tips:
- Once your current light bulbs burn out, replace them with LED bulbs. They may be more costly, but they use less electricity, which would save you money in the long run.
- Unplug electronics whenever they’re idle. They may be turned off, but they’re still using a small amount of power that, if given enough time, will add up to a lot of money.
- Repair any leaky faucet or toilet. It may cost money to repair them, but they will cost you more money by inflating your water bills if you let them be.
- Stop using old appliances. They consume more electricity than they normally should.
With these steps, you can reduce your utility bill by up to 25%. Since the average utility bill of a house is GBP£100, you can potentially save GBP£25 every month, which is more than worth it.
3. Pay only the minimum payments of your debts
Experts would often advise people to pay more than the minimum payment of their debts (such as bad credit loans, or loans for unemployed) to save money. Not only is it good for your credit score, but you’re also effectively reducing the interest that you owe the lender. However, this is only advisable if you have a job. Otherwise, it is best if you pay only the minimum and focus on your essentials.
4. Take advantage of unemployment benefits
If you have yet to apply for unemployment benefits, make sure you do so as soon as possible.
Jobseeker’s Allowance, the benefit in the UK, provides you with a personal allowance of up to GBP£75 every week, which is by no means a small amount of money.
If you’re already receiving these benefits, make sure you stay on top of your paperwork. Keep in mind that there are possibly thousands of other people like you, so taking the initiative would ensure you receive the benefits on time.
5. Get a side hustle as soon as possible
How to budget when you’re unemployed for a long term? If you want to manage your finances more easily, you need to have more money to work with. Fortunately, there are many other ways to earn money aside from employment. Here are some examples of side hustles that can help you earn extra income:
- Become a virtual tutor to kids from foreign countries.
- Offer pet sitting services to people who often leave their homes.
- Join online surveys in hopes of getting gift cards or even cash.
- Sell items you no longer use.
These should help you earn more money, but keep in mind that even with extra income, you must still practice the aforementioned budgeting tips to maximize the value of your money.
It can be difficult to learn how to budget properly with a job, so it’s even more challenging to figure out how to budget when you’re unemployed. However, with these tips, you should be able to manage your finances more easily. It will also help if you involve the other members of your household, if there are any, so they could cooperate and help lower the bills at home.