Cunningham also recommends avoiding credit card debt, which can balloon during a period of lower or no income. People who are unemployed, she says, sometimes turn to high-interest rate payday loans, which can inflict long-term financial damage, including ruining one's credit history.
To avoid that kind of debacle, Cunningham says anyone who gets laid off should immediately call any creditors, including student loan providers or credit card companies, to explain the situation. They might be able to put loan payments on hold (while still charging interest) in order to prevent a default. Failing to make even minimum payments on debts owed can do long-term damage to your credit history.
[See: 50 Smart Money Moves.]
A garage sale or other sale of non-essential assets (do you have a boat taking up space in your garage, or a second car?) can also offer a much-needed income stream during unemployment. Grocery extras, cable and gym memberships can also often be trimmed, Cunningham says, adding that tapping into retirement or college savings accounts should only be done as a very last resort.
Aaron, the blogger who experienced a year and a half of unemployment, offers one final tip for anyone who might find themselves suddenly unemployed: "I really see having a side income as more valuable than ever," he says. That's why he recommends making the time for a "side job" even if you are also juggling a full-time one – because that full-time one could suddenly disappear without warning.