SAN MATEO, CA--(Marketwire - June 22, 2010) - Just two weeks away from the nation's next unemployment report and with 15 million individuals currently unemployed as of May 2010(1), Congress has yet to pass extensions of key unemployment benefits for many Americans. To help plan for the potential loss of these benefits and to assist families on tightening budgets make the most of reduced incomes, consumer money resource Bills.com today shared timely financial tips for the unemployed or underemployed.
While legislators continue to consider an extension of unemployment wages, the government subsidy for COBRA has already expired for those laid off on or after June 1, 2010. This means that in addition to lost wages, many unemployed Americans could be forced to pay the full cost of COBRA insurance in order to extend their current medical benefits. According to health-care advocacy group Families USA, this will raise the average monthly COBRA premium from $387 with the subsidy to $1,107 without it.
"It's a tragic reality that many unemployed Americans are facing the sudden loss of these benefits even as employment prospects remain dim," said Ethan Ewing, president of Bills.com. "Families need to make quick and difficult decisions in the first few weeks of unemployment to effectively conserve their resources. Bills.com has compiled this list to help families make the most informed decisions possible during this transition."
Newly unemployed workers should immediately contact their state's unemployment office to file the relevant paperwork and make themselves eligible for benefits. Most offices can be found through a simple Web search.
Those facing a sudden loss of benefits should begin to do the following:
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Re-Budget: Your first step should be to revise the family budget in line with your new economic reality. Assess your cash reserves, prioritize your monthly bills, and then allocate enough money each month to cover critical expenses such as groceries, rent, and utilities. Avoid paying down extra debt or luxury spending to conserve cash.
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Communicate: Open up lines of communication with your creditors and providers so they understand your situation and can work with you whenever possible. Many credit card companies and utilities will offer temporary assistance to low income or unemployed individuals to help them meet their monthly obligations.
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Plan ahead: A little planning can net big savings over time. If you're job-hunting, map your daily route to minimize gas or public transportation expenses. Set a weekly dine-at-home menu to reduce the temptation to eat out. Eat a good breakfast to avoid snacking, and bring a brown bag lunch if you'll be out job-hunting all day.
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Cut expenses: Help keep your new budget by identifying areas where you can reduce costs. Consider lifestyle changes such as quit smoking, shop at warehouse stores, purchase generic prescriptions, clip coupons, entertain the family at home, sell old items on eBay, and consider bartering for services as ways to limit overhead and extend your budget. For extreme circumstances, consider living with a relative while searching for employment.
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Insurance alternatives: If you find yourself unable to meet the monthly premiums for COBRA benefits, consider looking at the private market. There is insurance available for most people with some concessions in terms of flexibility or coverage. Additionally, those on an extreme budget can turn to public or community health clinics for services usually offered on a sliding scale. Some states also offer public health insurance and medical programs for low-income families with children.
Individuals with specific questions about unemployment benefits or how to best stretch their budget, can use the Bills.com Ask Bill service to receive free, personalized answers to their questions. This service can be found at http://www.bills.com/askbill/.
About Bills.com
Bills.com is the leading resource for free and personalized money help. Founded by a group of financial experts committed to helping consumers save time, money and stress, Bills.com is designed to give consumers confidence in making money decisions. The site offers useful information, powerful tools, and real money experts to give consumers the information they need in the way they want it.
(1)Bureau of Labor Statistics Department of Labor, The Employment Situation – May 2010 (press release), June 4, 2010
Contact Information:
Press Contact:
Michael Azzano
Cosmo PR
415/596-1978