What to Do When Losing Expanded Unemployment Benefits from the Government

• Author: Jessica Williams
• Posted: 2024-06-17

Expanded federal; unemployment benefits have been a godsend for millions of workers who have e lost their job due to COVID-19. Congress gave unemployed workers an extra $600 per week to keep them afloat during the pandemic and to ensure that they stayed at home instead of looking for work. However, the money runs out at the end of July, and the two parties are at odds over whether to fund additional expanded unemployment benefits. Families who are relying on the expanded benefits will now have to make significant adjustments in their personal finances as the benefits expire. Here are five things that families can do to adjust for the loss of expanded unemployment before the benefits run out.

There Is Still Unemployment

Normally, unemployment benefits last workers for 26 weeks. The CARES Act expanded those benefits to 39 weeks total, and there is talk that Congress will further lengthen unemployment benefits even into 2021 for workers who still cannot find a job. While the $600 benefits is quite a big deal for many families, they are still receiving something from the state government, even if it not the same as what they were receiving before. Those benefits will not stop just because the expanded benefits did, so people should remember to continue to file.

Look to Side Hustle or Temporary Work

Of course, side hustle and temporary work will reduce the amount that you receive in unemployment benefits. However, with the average weekly benefit of regular unemployment being just over $400 (and many receiving less than that), you may be able to make more when you take on gig work or other side hustle. We understand that there is still not a robust market for Uber drivers but things such as food delivery gigs still need workers. Companies are also hiring for short temporary jobs as they do not yet have visibility into whether economic conditions will begin to improve. Each person will need to do their own calculation about whether it is more worth it to do some work, even if it is not in their field.

Get a Zero Balance Credit Card

You may be able to cut some of your monthly expenses by getting a zero interest rate balance transfer. You will need to pay some fees for it, but it could slice hundreds of dollars a month off of your interest expenses. You should apply for the credit card now before your credit begins to take a hit from extended unemployment.

Take a Loan from Retirement

Tou normally should not take loans or withdrawing from your retirement because you need to pay both federal and state taxes as well as an early retirement penalty for money that you take from retirement that you cannot or will not pay back. There is at least a temporary break from having to pay the early withdrawal penalty from your retirement if you take a hardship withdrawal, so that at least takes some of the sting away from taking money out early. If it comes down to taking a hardship withdrawal and taking on high interest rate loans, it is best to use what is already yours because you will either owe money to yourself or just have to pay taxes on it.

Negotiate with Your Lenders

You may still be able to negotiate with your creditors because they will want to be paid something as opposed to having to foreclose or deal with your bankruptcy. Some lenders may even have programs that can reduce your bills or help keep you afloat right now. If you have received expended unemployment, chances are that you still have been able to make your rent or mortgage payment. Therefore, this may be the initial call that you make to your bank or landlord. We cannot guarantee that they will work with you, but banks may not want to foreclose immediately because they may risk losing money on your home.

Review Your Finances and Trim Purchases

Of course, the presence of the extra unemployment benefits may have put off what you need to do in looking to trim your spending to the bone. You should review all of your expenses, making a list of where you think you need to cut expenditures that are not absolutely necessary. You should make this plan now before your expanded benefits expire.