When you lose your job, you may have to put yourself on a financial diet. Just as losing weight is simple if you eat less (and exercise more), staying afloat financially is simple if you spend less. Is this process going to be easy? No, of course not. But it can be done with a little self-discipline, some creativity, and a lot of planning.

Plan for a six-month period of unemployment

It’s hard to know how long you’ll be unemployed. You may find a new job within a matter of weeks, or it may take you months. However, it’s best to plan for a worst-case scenario, probably six months. Most likely, you’ll find a job sooner, and you can throw the rest of your plan in the trash. But, if you don’t find a job quickly, at least you’ll be prepared.

Follow the plan

When you’ve come up with a financial plan, stick to it. Like any diet, you’ll be tempted to cheat by spending a little more money than you should. You may even find that as time goes by, you want to change your plan a bit. That’s OK. Your plan is designed to be flexible so that you don’t feel too burdened by something that seems unworkable.

Adjust your expectations

No, finding a new job is not going to be easy. First, despite the number of appealing job ads you see in the Sunday paper, finding a new job is not going to be easy. Even if you’re one of the lucky few that’s working in an occupation that’s in high demand, finding a new job is probably going to take at least a few weeks and maybe months. Your job search may look something like this:

  • Week 1: Send out ten resumes, and wait for the phone to ring.
  • Week 2: Send out ten more resumes, and wait some more.
  • Week 3: Send out five resumes for jobs you really want and five for jobs that you really don’t want. The phone rings. It’s your mother.
  • Week 4: The phone rings. Then it rings again. You line up two job interviews. You send out three more resumes.
  • Week 5: You have two interviews, and send out five more resumes. You’re called for a second interview at one of the jobs.
  • Week 6: Good news! You’re hired! Bad news: You can’t start for two more weeks.

As you can see, even a successful job search can take a while, even if you’re a good candidate in a good job market. Prepare yourself for this by drawing up a financial plan as soon as you lose your job.

Expect that life is going to change

When you lose your job, you probably won’t be able to live the same way you lived when you had a job. If you try to live the same way, there’s a good chance you won’t survive financially. If you’re unemployed for only a few weeks, your life might not change radically. Perhaps you’ll only need to spend a little less on groceries, go out to eat once every two weeks instead of once a week, and then dip into your savings account. But if you’re unemployed for months, or if your basic living expenses are high, you’re going to have to take a more radical approach to survive. You may have to sell your house, your car, or take a temporary job. Prepare yourself mentally for this.

Map out your priorities – How desperate are you?

Desperation can trick you. Things that you once said that you’d never do, seem more and more appealing as time passes and you can’t find a new job. When you started your job search, maybe you said “I’ll do anything to survive, but I won’t sell my Jeep!” Four months late, you’re saying, “OK, maybe the Jeep has to go, but I’ll never disconnect my cable.” Hopefully, you’ll never reach the point where you say, “I’ll declare bankruptcy, but only Chapter 13, not Chapter 7!” After all, you do have some pride, don’t you? What are the things you will and won’t do, will or won’t sell to survive financially? At this point, do yourself a favor and map them out.

Remember, diets (even financial ones) don’t last forever

Keep in mind as you plan for unemployment that even though you’re on a financial diet, no diet lasts forever. At some point, you’ll find another job and the crisis will pass. Therefore, you want to be especially careful that the decisions you make now aren’t shortsighted. Do what you can to survive, but only do what you really have to.

Example(s): When Jeff was feeling especially desperate one day, he sold his lawn mower at a garage sale for $75. Two weeks later, he landed a job at a software company, and his lawn had grown six inches. Jeff was forced to spend $350 for a new mower.

Draft a survival budget

The next step is to draft a survival budget. If you currently have a budget, use that as a guide. If you don’t, you’ll have to start from scratch by listing all your income and expenses. A survival budget is a bare-bones version of a regular budget. What you want to end up with is an idea of what income you need to actually survive. Start by listing your expenses and your post-employment income. Remember to include only expenses that are necessary; eliminate any items that are luxuries or that you could reasonably do without.