"Knowledge will forever govern ignorance"

--James Madison--

"The real division is not between conservatives and revolutionaries, but between authoritarians and libertarians"

--George Orwell--

What To Tell Your Unemployed Clients

As a few of you know, I am a financial planner. Just for preemptive purposes, this does not automatically make me a 1%'er Wall Street Pig Bankster. I wish. It would be cool to even return to the top quintile. I've never worked at any sort of bank, and any former Wall Street connections are long ago.

Anyway, I do fee-for-advice planning. Most of that sort of business these days is budget coaching to help people avoid bankruptcy court. I see a lot of unemployed, self employed and under employed people. I still see people for life and retirement planning, too, but less of it by the year.

In case you're wondering how people with budget problems can pay me, they're usually sent to me by their attorneys, and I get paid out of a trust fund that is set up for every bankruptcy estate. The courts frequently want to see that someone made a real effort to avoid being there in the first place, and I charge a lot less than credit counseling services do. Sometimes they can't be avoided, though, because the judge can insist that you go to one of them first.

At any rate, I see a lot of unemployed people in the course of my work. I'm even one of them. Owning a business is not the same as having a job.

I belong to a couple of professional organizations. One of them sent me an e-mail today about what to say to unemployed clients. So I read it, and thought that I'd share some of their sage wisdom with you.
Be prepared. Make an honest assessment of your job security, preferably before you become unemployed. If your future with your current employer is in doubt, consider setting aside some extra money.
Now, I don't know about you, but that sounds like excellent advice for someone who isn't unemployed. Frankly, setting aside some extra money is always good advice for anyone who can do it. You never know.
“I tell my clients that most can make a 5% change in their budgets with no lifestyle change,” said Joe Q Blow, principal and wealth manager at Wealthy Pig Wealth Management. “At 10%, then you start making lifestyle decisions.”
Disconnected much? Any drop in income results in "lifestyle decisions" for most people. 5% of $50K is $2500, and I don't know anyone who makes $50K who wouldn't have to change something lifestylewise if they lost $2500/yr income. Besides, that isn't how it's going to work for most people. The drop in income if they're laid off is going to be closer to 100%. That'll force some lifestyle decisions on pretty much anyone.

Mac 'n cheese or spaghetti with "meat sauce"? That sort of lifestyle decision.
“You are far better off paying the minimum on your debt, said Jack Sneed of Sneed and Beestly Advisors. “Try to cut them down to interest only, if possible.” Some who are newly unemployed take their severance checks and pay off credit card and other high-interest debt, but that only limits their options in the long run, Mr. Sneed said. “Cash allows you the flexibility of making choices, and allows you the luxury to discriminate between jobs.”
If I said something like that and a bankruptcy court judge heard about it, well...they wouldn't like it much. Severance checks? What a quaint notion. Flexibility? At this point, people are making minimum payments out of necessity, not strategy. Strategy is for people who still have options.
Don’t give up your gym membership. Baby boomer job hunters in particular need to stay in shape to be marketable, said Mr Blow. Quitting the gym is the worst move they can make, unless they have a lower-cost way of staying in top shape. “Stay well dressed and well pressed,” he said.
I just don't know what to say. Yes, you should always dress as well as you can when job hunting, and no, it doesn't hurt to look buff. But cutting a gym membership might just free up enough money to buy a few groceries. You can always run around the block and do sit ups in front of the TV. I should probably try it.

Jack LaLanne made millions selling big rubber bands for a couple of bucks and showing people, for free, how to do like a million exercises with that and a chair. Then he died without even reaching 100, which shows you what a crock "healthy living" is. George Burns drank, smoked and ate good stuff, and lived to 100. He probably never saw a budget coach, either.
Don’t rule out lower paying jobs
No shit. Most people are aware that a bad job pays better than no job. Most unemployed people would take almost anything offered.
Hire a career coach.
Yes, that's right. If you lose your job, go pay someone else money to give you advice that probably won't help you find a new job anyway. But there's more...
Baby boomers are the most educated generation in history, but they aren’t very good at evaluating the talents and gifts they bring to a job, said Daisy Dingle, director of career and life coaching for Dingle Investment People.
Instead, some resort to unhelpful job-hunt strategies, such as applying for jobs that are a level below their old position, thinking that it will improve their odds. It doesn’t, because there is always another candidate who fits the role better, she said.
“The advice that is thrown out all the time is to get clear about who you are and what you want,” said Daisy. “The problem is people need help getting clear. If you don’t have that, you can network till you are blue in the face and it won’t work.”
WTF? The last guy just told me to go ahead and take a lower paying job. Now this lady says starve until you get your dream job, or at least your old job back.


Not only that, but for most people, "networking" means calling Joe at Radio Shack to see if they need extra help for the holiday season.

So, to recap, this is what I'm supposed to tell unemployed clients:

*Be prepared in advance to lose your job.

*If you didn't prepare, tough cookies.

*Don't change your lifestyle unless your income falls at least 10%.

*Make minimum payments on your credit cards.

*Don't give up that gym membership!

*Consider taking a lower paying job.

*Don't consider taking a lower paying job.

Got that? I just gave you hundreds of dollars worth of bodacious advice from real people in the same business that I'm in, except that they're smarter than I am.  They must be.  After all, they got published.

I gave you this startling secret advice for free, too.  You're welcome.