How to Make a Living Without a Job
As an employee, we get the occasional thought on the back of our mind, “what would happen if I was let go tomorrow?” For many, that would come with an immense amount of stress, fear, and anxiety among many other emotions.
“Making a living” essentially involves two pieces. Your cost of living, and your income. If you can lower your cost of living, you won’t need to have as large of an income to “make a living” and if you raise your income, you can afford a larger cost of living. Therefore, when it comes to “making a living” you should focus on lowering your expenses or raising your income.
In this post, we hope to ease some of the anxiety that might come with a job loss and teach you how you can continue your life during a temporary or long-term lack (or degraded) source of income.
If you live in an area with a high cost of living (I’m looking at you California), you can consider moving to lower your living expenses. Your housing expense is commonly the largest piece of your budget, so lowering these costs will help you stay afloat without a job. Some locations with the lowest cost of living are listed below:
For many of us, the reason we dread moving is because of finding a new job, so without this restraint, this might be the perfect time to pack your bags and find a new living space.
Live Rent Free
If you live in an area with a normal or low cost of living already, you can still consider moving. Downsizing your home, moving in with others, or renting out a piece of your home are all great ways to lower your housing costs.
The least sexy option might even be to move in with family or friends to save some cash. You should offer to pay at least your portion of the electric and water bills throughout your stay and communicate with temporary landlord about any rules or standards they may have.
Start or Grow a Side Hustle
Whenever you lose your primary source of income, it’s smart to have an additional source of income that can pick up some of the slack lost, and a side hustle can give you that privilege.
There are many different types of side hustles for just about any skill you may have and some that require no skills at all. If you are without a job, this might be the perfect time to start your side hustle. From flipping furniture to becoming an online personal trainer, or even starting a photography gig, there are many different side hustles that suit just about anyone.
Make your Money Work For You
If you’re familiar with the FIRE movement (Financial Independence, Retire Early), you probably know everything about passive income.
Passive income is all about building a stream of income that you do not actively take part in. For example, some people will choose to use dividend investing as a way to create a passive income stream. By purchasing stocks that routinely pay a dividend, you can use this income to purchase even more of the stock and exponentially grow your income. This is the basic idea behind passive income.
There are many different passive income streams you might consider. You could create an eBook or eGuide for others to purchase, you could rent out a piece of your home or an entire property, or you could start a blog that is monetized with digital advertising.
If you’re interested in establishing a life in which you do not have to report to the office Monday through Friday, passive income is one of the best ways to make it happen.
Refinance your Mortgage or Student Debt
Take advantage of record-low interest rates by refinancing your home or student loans to help keep your budget in the green. With 30-year mortgages refinances hovering between 3-4%, and 15-year rates touching the high 2% range currently, refinancing could be a great option.
If you expect a long term job loss, you could consider a cash-out refinance on your mortgage to pad your savings for the long haul. This will essentially allow you to take equity out of your home in the form of cash in exchange for a larger balance and extended loan term.
Student loans can also be refinanced to lower interest rates, potentially saving you hundreds per year depending on your balances.
Only Spend Money on Essentials
Whenever facing a job loss, one of the first things you should do is to cut any unnecessary expenses. It’s wise to revisit your budget and look for areas to cut back or eliminate altogether.
Some of the most common unnecessary expenses are:
- Eating out and food costs
- Entertainment costs
- Cable television costs
- Internet costs (if you have upgraded services)
- Electricity and water costs
Pick up a Part-Time Job
If you’re in a serious crunch for cash, a part-time job could help you pay the essential bills to keep your rent or mortgage paid and the lights on. Depending on your situation, this might not be as much as you were previously making, but it will still have a positive impact on your finances. Some options you can consider are:
- Event staff
- Grocery stores or wholesale clubs
Become a Freelancer
Some companies will choose to outsource some of their work to avoid the costs that come with employing a person full time. Take advantage of these companies by offering your services at a rate that suits your skills. These gigs will typically be paid hourly or by the project providing you the flexibility to adjust your schedule and workload as tasks are assigned.
When becoming a freelancer, you’ll need to establish your skills throughout the community to build trust with local companies. Some freelancers will choose to do this by working on several projects for free or at a low rate to build their portfolio and prove their expertise.
Tap into your savings
Whenever you lose a job, your cash flow can quickly turn negative after your monthly expenses are paid. If you’re fortunate enough to have an emergency fund established, this is the time to use it! We recommend that you do not deplete the savings all at once if possible and instead spread your savings over the next 6 to 12 months or until a new source of income is secured.
Apply for an Interest-Free Credit Card
In the event that you cannot pay your bills, you might consider applying for an interest-free credit card. This option should only be considered if you cannot afford to pay your bills as credit card debt can easily get out of hand.
Getting a new credit card comes with several benefits:
- Many cards will offer intro rates with 0% interest for the first 12 to 15 months, making it a good option for some.
- You can often score some type of sign up bonus whenever you spend a certain amount of money within the first few months of owning the card. Even if it’s just an extra $100 on purchases that you already planned to make, that might be the difference in having your water bill paid on time or not.
- Rewards can rack up if you use your card on everyday purchases. You can expect to earn at a minimum of 1% in rewards on your purchases, which can amount to a couple of hundred dollars annually.
NOTE: It’s important to understand your credit score before applying. If you have a very low credit score (< 650), it’s probably not wise to apply for a new line of credit as you’ll most likely be rejected.
Take an Early Withdrawal from your Retirement Account
For those who have worked over the years, you might have a strong set of assets in your retirement account. If you are under the age of 65, you can withdraw some of your assets, but it will come with penalties and taxes alike.
Caution: ONLY do this if you absolutely have to. The taxes and penalties on an early withdrawal can cost thousands of hard-earned dollars.
Take Time for Yourself to Grow
If you’ve been in the workforce for some time now, without any break, this might be a time for you to take a week to yourself to work on your mental health.
Taking time to yourself does not mean sitting on the couch watching television or playing games. Instead, you should aim to gain knowledge and improve your mental health.
If there are any free online courses that you’ve been debating over the previous few months but haven’t had the time to dedicate to them, this is your chance.
There are many online resources to advance your knowledge in many different sectors. Some of our favorites include:
What Not to Do When You Lose a Job
The stress and anxiety that comes with a job loss can cause people to make irrational decisions, including your finances. These poor decisions can worsen your stress and anxiety, causing a tailspin that can quickly get out of hand.
When you lose a source of income, this is not the time to increase your expenses or purchase a new car. As mentioned above, you should be looking to cut any expenses possible.
When searching for a new job, you might become discouraged if you do not receive any response from potential employers at first.
It’s best to stick with it. Your next potential could be one application submission away so you certainly wouldn’t want to miss out on it by giving up.
Let Emotions Take Control
When you lose a job, it’s easy for your emotions to take full control of your actions which has the potential to cause serious issues. Tame your emotions and think before vocalizing your thoughts to ensure your thoughts are validated and appropriate.
Some people will choose to take to social media to express their emotions when losing a job and this can lead to a lifetime of consequences. Other potential employers will commonly browse through your social media accounts and one mistake could cost you a future job.
Whether you’re planning to leave your current position or you’re dealing with a job loss, making a living without a full-time job can bring much stress and anxiety.
By building a passive income stream, you can ease some of the pressures that come without a job. In addition to cutting any unnecessary expenses, this might be a good time to consider starting a side hustle or becoming a freelancer to boost your income.
There are many things you should and shouldn’t do when you lose a job. Try to avoid expressing negative emotions or giving up on the job hunt altogether. Instead, you should try to remain positive and establish a plan to keep your finances in check.
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