Strategies to Survive Unemployment, Job Loss,Injury and Disability At Work

When you get laid off, injured or become unemployed the money may stop coming in but the bills never stop. Are you prepared for this situation if it happens? Red Alert….panic sets in, frustration, stress, what will you do?  Collection agencies will come calling and doing everything in their power to get money from you if you don’t pay. They will even go as far as taking you to court if they believe you can pay and have exhausted all other avenues.

Investing in yourself is, if not the most important tip you should take away from this post. You are your number one priority and you should take the time to know who you are and what you have to offer.

That’s not all though, not everything you have to pay for comes in the form of a bill. You still need to pay for your food or whatever else you pay cash for throughout the month. Thank goodness for local food banks who try their hardest to keep the shelves full for local families in need and to those that donate. Please, I have to say, for goodness sakes stay away from those Payday Loan shops or you will forever be indebted to them no matter what anyone tells you. It’s a cycle that is hard to break and will cost you an arm and leg. That’s like jumping from one fire into another with no hope in hell of getting out unless someone throws you a rope. Odds of that happening are slim to none unless you have some rich mates, win the lottery or simply have family who bail you out every time you create a mess like this.

Getting terminated or laid off can take its toll on someone and all sorts of emotions can surface especially if it was unexpected. When people tell me they have a secure job I always tell them there is no such a thing. How many people are we hearing of that are losing their jobs after many years of service? Just look at Ford manufacturing St.Thomas in Sept 2011  which closed down with over 1200 employees who lost their so-called “secure jobs”. Ford exported over 8 million vehicles around the world and was Canada’s Top Selling vehicle maker.  How many of these employees were students fresh out of high school that skipped College or University for a huge pay each week? Was it worth it?

I bet if you ask many of them they wish they had furthered their education after high school to gain some portable skills such as a red seal apprenticeship trade or nursing. Some are still struggling today in 2012 as it’s not an easy transition. Working in manufacturing facilities for a long time is like Shawshank, you get used to life on the inside. Not many people like to return to school well into their 30’s, 40’s or older with mortgage payments and children. Lucrative pay checks lure people in and once they sign on the dotted line it’s hard to break free especially when they start buying big-ticket items.

Our mate who worked at a car manufacturer for a few years gave up her $80k a year plus overtime job and is now a few steps away from becoming a doctor. Like Ford all things may come to an end or a slow-down unless businesses can keep up with the demands of the economy something that Ford was lacking. Not many people are running around in big gas guzzlers these days, not even me and I drive a truck. We need to prepare ourselves for any instance that may come our way even if it’s 20 years down the road no matter what industry we work in.

Then there are the folks who get injured at work or off the job and struggle with their insurance companies as the process can be daunting. Working with insurance companies such as Workplace Safety and Insurance Board (WSIB) or Long term or Short term insurance through your works group benefits may take some time depending on your specific case. Always be in the know and understand your rights at work. If anyone has ever told you “Safety First”, heed that warning. Don’t let anyone bully you into doing a job that is unsafe not even a supervisor. I’m sure there are many people who could tell you a story or two about how they wished they’d use their voice.

In many of these cases people who struggle simply don’t have any money saved up or have very little to cover expenses. They may have to wait until they secure new employment, EI benefits or insurance benefits kick in or receive severance pay if they are entitled. It takes upwards of 2 weeks unpaid if you’ve lost your job which was no fault of your own through (EI) employment insurance in Canada. Of course there are other stipulations to qualify and you should start the process immediately. What happens if you and your spouse are both working at the same facility and both were laid off? How does that impact the budget? Are you prepared for this and how?

These are questions that should be answered and fast and before something happens. We like to keep upwards of 1 year in our Emergency Savings Fund in case of a scenario like the above as no job is a secure job. Most folks recommend 3-6 months although in today’s economy assess your situation and do what’s right for you. This should be ample time for most to sort out the situation by finding new meaningful employment or return to school to upgrade skills.

Strategies in Case of a Layoff, Loss of Job, Injury or Disability

  • Emotional Well Being- It’s important to take care of you and your emotions. If that means to take a break for a couple of days to gather your thoughts then do it. Call on your support networks like your friends and family to chat to and then pick yourself up and work hard at investing in YOU.
  • Budget! Enough said, we all should be budgeting our money so we know where it is going. It’s not difficult to do and simply educating yourself on steps on designing and using a budget are virtually all over the internet. You can also download online budget spreadsheets to use as your own.
  • Group Benefits- Do you know what they entail? You know that little booklet your employer gives you well make sure you read it cover to cover and know what benefits you have ahead of time. Know what your options are or will be when the time comes including your investments.
  • Understand Your Rights- Understand your rights as an employee and review the Employment Standards Act (fact sheet), WSIB Act or the Disability Insurance Policies to make sure you are covered and how. Understanding and knowing puts you in an informed position rather than relying on others to guide you along the way. If you are unsure ask your Human Resources professional for this information. Knowledge is power.
  • Emergency Savings is crucial to your financial well-being and will be handy in any emergency situation.
  • Your Resume should be visited at least every few months and updated to add any new skills that you have mastered or milestones you have reached.You can always edit the final copy but keep adding to it until needed. Most people wait until they are laid off or lose their job and tend to forget dates, and important skills employers may look for.
  • Cut expenses in your household while you can such as electricity, water usage and your communications bill (TV, internet, cell phone and home phone). If you call your communications company like Rogers or Bell retention or billing department you may be able to haggle a better deal. TIP: If you want to know how much electricity you are using visit your local library and see if they lend out the kil-o-watt meter to check your appliance usage.
  • Time of Use- If you have the smart meter installed outside your home start living with-in the cheap times of use as it can really add up if you are not mindful of this.
  • Spend less than you earn. Period! Stop putting money on credit, stay out of debt.
  • Grocery shopping can be a huge cost for anyone. Start shopping your weekly flyers, using coupons, price matching and stocking up on items that you know you will use if they are at the ‘best price” keeping in mind expiry dates. You can also post your shops in our grocery game challenge to keep track of your shopping and budget.
  • Shop second-hand for clothing and other items to save money in the budget. There are loads of shops and online outlets such as kijiji, Freecycle and Craigslist. You can also take advantage of garage sales in the summer time.
  • Career Change is something that most people never think about. If you are thinking about a career change you should do your homework. Research the career and know that if and when the time comes you already have a plan B in place.
  • Try to live on one income if you are a couple but that’s personal choice but certainly will help in the savings department. We purchased our home while I was in school and used my lower wage at the time which was $15.00 an hour to buy our first home.
  • Retirement Savings- if you have the money keep putting money away into your (Registered Retirement Savings Plan)RRSP, Tax Free Savings Account (TFSA) or any other investments for your future especially if your employer has an investment matching program.
  • Education is important no matter how old you are. Never stop learning. Always try to gain new skills whether it’s from your employer or you taking it upon yourself. It’s important to have a back up plan and skills to go along with it. You will be happy you did. Some employers offer an education incentive.
  • Networking is so important and people tend to forget about this. I always used to say you never know who your next boss will be so try to be nice to everyone you meet. Don’t be shy, introduce yourself and find out what others know and what they do for a living. You may be surprised how many people find their next job just from knowing someone. It’s true… “It’s all about who you know

Some other important pages

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All Images credit: Copyright (c) <a href=’http://www.123rf.com’>123RF Stock Photos</a>

Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. Mary F Campbell says:

    Great article Mr CBB! The last time hubby and I were through this was 16 years ago. He was downsized out of his position & went back to school to retrain for a different field. I took a second full time job – in fact I covered a girlfriend’s maternity leave. She got her job done exactly as she wanted it done & didn’t come back to a mess. I had double income to carry us through. Would I want to do it again, no. Would I do it if need be…you bet!

  2. I get laid off regularly through the year. I wish I could afford to go back to school for another field and not have to deal with it anymore. I feel stuck.

  3. I have been off work since spring of 2010 due to an illness….with no return date in sight. I used my 20 weeks of E.I. up pretty quick and my only other income is a small child support payment. My father always said to have enough money set aside to live off of for 6 months ….I had a bit more than that….thank goodness. I cannot apply for any other services to help out because I still have some savings. Living frugal is a necessity …coupons, sales, slightly used, washing at night-drying on the line, buying in bulk, growing my own produce, canning and freezing in season fruits and veggies and not using a credit card have helped. The only downfall is that my oldest starts University in the fall ….I was SHOCKED at the tuition cost alone….not to mention cost of living away from home, food and necessities. It is a struggle but it can and will be done……

    • Hi Lynda,
      Thanks for sharing your story and what you have been doing to keep afloat. I had a Facebook fan just this afternoon post that it costs upwards of $84k to get a degree in University away from home. That’s incredible. I hope students are ready for this debt and know what they are getting themselves into. Scary. Cheers Mr.CBB

  4. Barb Foster says:

    The most important point you touched on is to know your rights! When I was a retail store managr my employer tried to offer me a different position under a different banner at a different location when I returned from maternity leave instead of offering me my job back (which they were legally responsible to do). With the aid of an attorney I did receive my job back, however the company was bitter and tried everything they could to make my life difficult. Their behaviour came to a head a year later when I was brought in on my day off and offered a forced demotion to part-time, loss of management bonuses and to be taken from salary to hourly. If I didn’t except then they would take that as a sign of my resignation 6 weeks later without any further compensation. Although in hysterical tears through out the meeting (I had worked for the company for 8 years and was recently separated from my husband with 2 year old at home). I kept my wits about me and took the letter home not agreeing to sign anything. Turns out that on that day employees from several other locations were given the same “offer” and reacted with their hearts by quitting on the spot. They lost out. Although I had to contact my lawyer (again), I ended up getting a decent settlement from the company because I knew my rights and held my tongue. (My lawyer fees for this were claimable on my income taxes-a note that many people don’t know they can do.)
    Another thing I learned is to make sure you ask about your company RRSP’s. You have a short time period after termination to get them rolled into a private plan. A lot of HR deparments/companies do not provide this information freely.
    The last tip I would offer has to do with health/dental benefits/emergency health care coverage. I waited too long to look into this after my termination and ended up with a higher premium when I purchased a plan (for my daughter and I). Which brings me to another point, yes there are plans out there that you can qualify for and purchase which will cover you. The best one I found was through Manulife’s CoverMe program called Flex-Care where I pay for the level of coverage I want and need.

    • Lots of good points Barb some of which I was not aware of. I was not aware you could claim lawyers fees on your taxes. Is that any lawyers fees? I did know about rolling over your RRSP from your employer when you leave or are terminated and you are right they will not tell you but should be. It’s so important to know your rights as an employee in all these different situations in the blog post. You will be ready to make decisions but know that you don’t have to make any harsh decisions on the spot. Thanks for sharing your story!
      Mr.CBB

      • Barb Foster says:

        Yes, “You can deduct any legal fees you paid in the year to collect or establish a right to collect salary or wages”

        as well as if
        “You paid fees to collect (or establish a right to) a retiring allowance or pension benefit. However, you can only claim up to the amount of retiring allowance or pension income you received in the year, minus any part of these amounts transferred to a registered retirement savings plan or registered pension plan. You can carry forward, for up to seven years, legal fees that you cannot claim in the year”

        and the one I use the most:
        “•legal fees you paid relating to support payments that your current or former spouse or common-law partner, or the natural parent of your child, will have to pay to you. You can also deduct your expenses in the following situations:
        ◦You collected late support payments.
        ◦You established the amount of support payments from your current or former spouse or common-law partner.
        ◦You established the amount of support payments from the natural parent of your child (who is not your current or former spouse or common-law partner) where the support is payable under the terms of an order.
        ◦ You sought to obtain an increase in support payments.”

        quoted from the CRA: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/229/slry/fs-eng.html

        • Thanks Barb, I think that information will be handy for many people! I should do a blog post on that… if you want to do a personal blog post on how you survived a lay off and what happened to you and what you can do with the legal fees let me know. Fans love to learn from personal stories. I would love that if you could.. I can do the editing…

  5. Life is a learning process. There are surprises around every corner.

    I was unable to work for almost a year due to illness. When I became ill, I was self employed. I was ineligible for EI and had no disability. Our income took an immediate, drastic reduction. We survived it but, between the extra medical expenses and much lower income, it was really tough.

    We had an emergency fund but ended up using the whole thing in order to get by. We used a good chunk of our line of credit too, and still found there were months when we had nothing at all to spend on food.

    We survived because we’ve had past practice at being broke, and because we had a well stocked freezer and pantry. It was brutal – stressful emotionally and very frightening.

    I’m so grateful to be able to work now, and more grateful still to have found a job that I’m able to do because it’s less physically demanding. We are now rebuilding our finances. We’re living on a budget not much different from when I wasn’t working and directing every penny we can to paying down our debt and rebuilding our savings.

    • Thanks for sharing your story Aunt B. It’s amazing how we sometimes learn from our experiences. I bet you don’t ever want to be caught in that mess again. What advice would you give to other fans? Glad to hear you are using a budget and rebuilding your savings while paying down debt. Good for you! Mr.CBB

      • My advice to others in the situation is pretty simple really:

        I’m very glad we had an emergency fund. We used the whole thing and it still wasn’t enough to get us through the long period I was ill. Still, without it, our situation would have been a lot worse. We’re working hard to rebuild it now. You never know what might happen in the future!

        Using credit is never an ideal solution but, when we had used up all of our savings, our line of credit saved us from losing our house. We were able to access credit because we worked hard to keep our credit rating intact, and had set up a line of credit long before I fell ill, as a fall back plan. We hadn’t used any of our line of credit prior to this emergency and don’t plan to use it for anything else now that I’m back to work. Still, it’s nice to know you have a resource like that to call upon if you need it. Just be sure that, once the emergency has passed, you work hard to pay down your debt as quickly as possible.

        Make sure your pantry is full and your freezer well stocked. Do rotate your stock because it’s no good to you if it’s expired, but be sure you have a good quantity of food you can fall back on when times are tough. Dried beans, dehydrated vegetables, whole grains, raw ingredients from which you can make a wide variety of foods, are all your friends. You’d be amazed at how good a plate of rice and beans can look when you have no money in your pocket!

        Don’t count on your MSP (government provided healthcare) to cover all of your expenses. There are many things not covered by MSP, and they can cost you thousands of extra dollars at a time when you can ill afford the extra expense. Either set aside money to cover medical emergencies and long term care, or purchase extended health insurance.

        If you are paying a deductible on your prescriptions or other medical services and experience a sudden decrease in income, apply to the government for relief. They will do a reassessment based upon your current situation and it can save you a huge amount of money. If you need this reassessment and can’t get the government to act on it, go to your MLA’s office. They will assist you in working your way through the system.

        Be sure to purchase disability/loss of income insurance. My failure to do so was a very expensive oversight. Buy this insurance now, while you’re healthy and able to work. Because of my existing health problem, this insurance is no longer available to me.

        Remember that there’s a big difference between wants and needs. If you’ve enjoyed a comfortable income for some time an suddenly find yourself in difficult straits, it can be hard to differentiate but you need to be willing to make some tough choices in order to get by.

        Be willing to adapt, not only while you’re off work but afterwards too. I was unable to return to my previous work due to physical limitations arising from my illness. Sometimes when you’re made redundant, work in your field may not be available. You must be willing to take on something new, to make yourself available to different opportunities, and to upgrade your current skills or acquire new ones.

        Finally, keep it positive. It’s scary but it’s not insurmountable. You’ll get through it with a lot less stress if you stay focused on what you can do, instead of worrying about what you can’t. Attitude really does make a difference.

  6. Educating yourself is both the best offense and defense, in my opinion. Even if you’re laid off, don’t have money, and can’t get enough money in grants and loans to go to school, you can still check with local universities about auditing classes in your field. It may not get you a degree, but will look good on a resume when you go to apply for more jobs.

    • Yes, it looks better on your resume in the time period where you are not employed when they see you were doing something. If they see you took the time to educate yourself, volunteer anything it shows you have initiative and perseverance. Good points. Cheers Mr.CBB

  7. Great article! Luckily, I’ve never had to go through this and my job now is very secure. I think this is a great resource though for those who need it. Keep up the good work!

  8. I was just laid off last week so it was great reading this article. The Zellers store I worked at closed so I’ve had a 9 month warning. We’ve stocked up on personal care items and some grocery items, so we wouldn’t have to worry about that. I coupon to help save money and we don’t eat out. I’m looking into different things to do. Taking it easy this week to get things going. I have been applying to jobs that interest me for a few months now.
    The town I live in there is not many employment opporutunties. My partner has his own business and we have twin 15 yr old boys who have friends and family close by. So moving is not an option at this time, if we did we would move to the Coast and the boys don’t need the uprooting. Thinking about school…but ohh school :)

    • Sorry to hear of your job loss Vicki. I know that school sounds like a long time but it’s not so bad. If you can handle it financially this is your opportunity to do what you want to do. When I moved to Canada I had that opportunity and I finally took what I wanted to study and became who I wanted to in my career choice … and LOVE IT! Never give up… go for it! What do you plan on studying, do you know? Thanks for sharing Vicki.

  9. Hi Mr!
    Great article.
    Investing in your self is key – great mention!
    Desertification is also another big one – multiple income streams. This way if shit does hit the fan, there’s less of an impact.

    • I think that’s where I was leading with a Plan B but I know what you mean. Most people struggle with one income stream let alone 2 lol… how can we get more people to understand how important this is?

  10. Hey CB,

    Do you have any thing on life insurance? Term vs permanent? For example you can get a disability waiver on your life insurance. This means your costs maybe covered until 60 or 65 on your life insurace policy.

    Cheers,

    Brian

  11. Becky Delgado says:

    It’s great that you’ve stressed how bad an idea payday loans are. It’s easy to be tempted to take one of these when you’re facing unemployment and struggling to stay afloat. It’s a fast and easy way out, but one that comes at a steep price that will cost you dearly in the long run. Most people don’t realize that payday loans are not the only option available when you need cash fast to cover a medical expens or just to pay your bills. I’ve recently read a good guide to various alternatives: http://onlineloan24.com/blog/six-alternative-choices-to-payday-loans/ Just about any of these is a better idea than a payday loan, don’t you think?

  12. Networking is so important and people tend to forget about this. I always used to say you never know who your next boss will be so try to be nice to everyone you meet.

    ^^ Such a great statement^^

    Many years ago, my dad had a heart attack and was in hospital, as I sat by his bedside everyday, I noticed this lovely lady who cleaned his room, she would speak to him,in her native tongue, and broken English, always have a smile, and would wish him a speedy recovery. A couple of years later, I was part of a management team that opened a new hospital in the city we lived in. As often happens with new hospital openings, all the staff at the old hospital were laid off, their union contract over, and they had to reapply to work at the new hospital. Anyway, I remembered this young woman who was a housekeeper when my dad was ill, I remembered how nice she was, her smile, and her genuine “care” for my dads health. When it was her turn to be interviewed to get her “old job back” I recognized her, and mentioned to her that I remembered her, I made sure she was hired back to the housekeeping dept, then offered her a job in food services that was at a higher wage, and when I left that position I had promoted her to supervisor, and last I heard she is now in management at my old hospital.

    Wise words,”you never know who your next boss will be”

    • Wow, you took the words right out of my mouth as that is what I ALWAYS say. You never know who your next boss will be…. that my dear is one powerful statement that everyone needs to remember. We are not above each other because one day someone might be below and that person you treated like crap will be doing the hiring… or like your scenario you remembered how she treated your father and her work ethic.

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