Your weekly unemployment payments are about to shrink considerably if you’re one of the millions of out-of-work Americans receiving Unemployment Insurance or Pandemic Unemployment Assistance.
The sprawling $2 trillion CARES Act provides an extra $600 a week to every unemployment recipient who lost work due to the coronavirus. That provision expires July 31, unless extended through additional legislation. And don’t bank on an extension.
If there is to be an additional economic stimulus package, Senate Majority Leader Mitch McConnell vowed that it would not include additional funds to unemployment programs.
How to Prepare for the $600 Unemployment Benefit Reduction July 31
Without the $600 weekly boost, unemployment benefits won’t provide enough income for most people to stay afloat.
Here’s what you should do to prepare for the coming dip in income.
- Seek out a bridge job now before benefits expire. Applications to open positions are expected to explode once the $600 weekly bonus is gone. Bridge jobs might be lateral — or even downward ― career moves typically in a new job field. They’re not always glamorous. But, hey, they pay the bills. In-demand industries include shipping and delivery, online learning, grocery, operations and logistics, health care and cleaning services.
- Adjust your budget. A $600-a-week cut in income is deep. Budgeting won’t solve everything, but it can help. Switching to a bare-bones budget can help you weather a loss of income by focusing on essential expenses. Pause monthly subscriptions and services, and consider making only the minimum payments on essential debts for the meantime.
- Reach out to your creditors and landlord. Financial hardship may qualify you for plans to pause or reduce your payments such as an income-driven repayment plan or deferment or forbearance for student loans. Consider negotiating with your landlord if you can’t pay rent. Several major banks are also offering assistance to those financially affected by the pandemic.
- Apply for aid. Stimulus checks and unemployment payments aren’t the only forms of assistance. Many organizations are providing grants to artists, writers and hospitality workers who were financially impacted by COVID-19. The Small Business Administration also reopened applications for Economic Injury Disaster Loan Advances – which are effectively $1,000 grants per employee – for small business owners, freelancers, gig workers and independent contractors.
- Once you get some money coming in, launch a more judicious job hunt for a job you truly want. With a bridge job, you might find it’s the perfect time to test out a creative business idea or side hustle. And if you want a more traditional job, use this time to brush up your resume, put some feelers out in your network – or learn an entirely new, in-demand skill set. (Codecademy can help with that: It’s giving out 100,000 free memberships to teach jobless workers how to code and program.)
$600 a week is a serious chunk of money. Don’t wait until it’s gone to act.
Adam Hardy is a staff writer at The Penny Hoarder. He covers the gig economy, entrepreneurship and unique ways to make money. Read his latest articles here, or say hi on Twitter @hardyjournalism. Senior staff writer Nicole Dow contributed reporting.