Tips for the Unemployed and Financially Strapped Recent Graduate


As many Americans are now finding out–students included–it can be tough to keep going when you have lost your job through layoffs or you aren’t able to find a job fresh out of college. Many of us live paycheck to paycheck and don’t have a lot of savings put aside, not to mention that you’ve just graduated and haven’t had a regular source of income.

But being unemployed or financially hard-hit doesn’t have to define you, as long as you keep a cool head, work logically to address your money problems and try your hardest not to make late payments on student loans and other debt obligations.

Are economic problems weighing you down?

The first thing to keep in mind is this: don’t panic. You’re not the first person to be unemployed and you won’t be the last one either. It has become apparent that America will have a long, slow slog back to full employment and a prosperous economy. If that’s the case then you need to figure out ways to make the money you’ll need to survive and pay your bills: including those student loans that have been stacking up.

Saving Money

Look to save money in ANY way possible. Do you have a cell phone bill totaling over $75 each month? If so, look at alternative plans to see if you can save money. That might require you to reduce the amount of texts or phone calls you make, but in the long run you’ll be better off. Try using the internet to communicate more often instead of racking up your cell phone bill.

How about your electricity bills? Turn off some lights or unplug some high usage electronics. Not only will you save money you’ll also be helping the environment.

Another tip to save money: stop eating out. Likely, you’ve gotten into the habit of late night meals, fast food, and dinners out during your college days but now that you’re on your own so think about putting together a meal plan and learning how to cook. Shopping at grocery outlets, buying bulk meat, and cooking at home will save you more money than you think.

Also consider reducing the amount of money you spend on drinking. Try going a few months without alcohol and not only will your body thank you, your wallet will too.

Tax Time

Being unemployed or just out of college might have some advantages at tax time that you should be aware of. Since your income is low, your tax rate is low. You can lower it further by trying to write off expenses and taking advantage of tax credits.

Did you know that higher education expenses can be deducted? For the 2009 tax year, that amount can be as much as $4,000 for families meeting certain earning guidelines. In addition, there are two tax credits you can take advantage of: the Hope Scholarship Credit and Lifetime Learning Credit, both giving you a tax credit for tuition paid.

Another way that financially strapped students can benefit from the current tax structure is through the child tax credit if you have children. If you and your spouse are filing jointly, you earned less than $48, 279 last year, and you have three children, you could be in line for the maximum tax credit of $5,657. This is a refundable tax credit, so you get the money back even if you didn’t owe the government a thing.

One more tax deduction for your consideration: moving expenses. If you were required to move to take your first job you may qualify for this deduction if you moved more than 50 miles for work. In addition, you can deduct moving costs such as driving your car to your new home (20 cents per mile deduction) along with any parking fees or tolls incurred along the way.

Financial Hardship

If you are still unemployed after your student loan deferred payment grace period you can claim financial hardship with your lender. Deferment is temporary and limited to specific time frames, allowing you to suspend making your loan payments for economic hardship, unemployment, military deployment, internship, national service and similar situations. Even if you have taken advantage of one deferment you may still be able to apply for another one–just check with your lender to make sure.

There are many options available for the financially strapped consumer and recent college graduates to help them survive in this tough economy. It is important to remember to pay all your bills and if you do fall behind to get back on track as soon as possible. Someday you may want to purchase a home, get a new car, or finance a large expense, so keep your credit responsibilities under control.


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Categories: Personal Advice