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A money management plan when you’re in between jobs

Being unemployed, especially during the holidays, can be difficult. Whether you've recently been let go or you're in between careers, living without a paycheque hurts. Even so, it's not impossible. Avoid financial frustrations and crippling credit card debt by creating a foolproof money management plan.

Here are a handful of ways to stay financially and mentally sound during this difficult time.

1) File for unemployment

Every employed Canadian citizen pays into unemployment insurance. This is commonly referred to as EI or UI. Contrary to popular belief, you don't have to be laid off in order to collect unemployment insurance. Even if you quit voluntarily or are fired, you may still qualify for benefits.

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In order to find out whether or not you're eligible for EI, you'll need to fill out the proper paperwork. Visit the Service Canada Centre website or call the EI Centre at 1-866-783-5567 for more information. Don't delay making this call; unemployment benefits must be claimed within four weeks of being let go from your job.

This is also a good time to request records from your former employer. Part of the EI application process involves providing detailed information concerning your past 18 months of employment history, including total earnings. If you're unable to retrieve this information on your own, you can contact Service Canada directly and request assistance.

2) Take a knife to your budget…

Now that your primary source of income is gone, you're going to have to be far more careful when it comes to your daily spending habits. Sit down and figure out just what you used to spend your paycheque on. Tracking and analyzing your spending habits in detail will help you to pinpoint places to cut back. Eliminating unnecessary spending will create a small financial cushion while you scour the job market.

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Things to consider ditching at this time include dining out, premium cable channels, and shopping. Just be careful when opting out of subscription services. Termination fees on contracts are often quite steep. As such, remember to read the fine print closely in order to better decide whether cancelling your service is worth it at this point in time.

...but not at the expense of yourself

Yes, money might be tight at the moment. However, don't make a bad situation worse by beating yourself up over it. This means taking care of yourself by eating regular, healthy meals, and surrounding yourself with supportive friends and family members. You should also make sure that you have the proper insurance coverage in place in case of an emergency. Contact your former employer and inquire how long your insurance coverage is slated to last and what you can do to extend it.

Taking care of yourself also means putting your needs above those of others. If you're struggling to make ends meet, now is not the time to spot your sister a couple bucks or attend a friend's elaborate birthday party. Right now, your focus needs to be on you and the immediate needs of your family. You can't effectively help anyone else until you've taken the time to help yourself first.

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3) Don't avoid debt

Believe it or not, the bank might actually be able to help you handle your current income gap. For instance, you may be able to completely defer a student loan, or at least lower your payments, until you're back on your feet. This will help protect your cash flow and your credit score.

4) Evaluate your career and your future

The fastest way out of unemployment hell is to find a shiny new job. And while you might be tempted to take the first position that you're offered, be careful. Instead of rushing into a bad career choice, take some time to think about your short-term and long-term goals. Were you actually happy with your old job? If the answer was no, then perhaps this employment hiccup was actually a blessing in disguise. Now's your chance to make a fresh start and find a job that really speaks to your dreams, goals, and strengths.

Review your resume and make any necessary updates. Focus on the tasks you performed at your previous position and make sure to highlight any results that you achieved. Don't hesitate to go back and do this for every position listed on your resume. This is the document that will help you to land your next position so it's best to make sure it's in stellar shape.

You will get through this!

Even if your savings are limited, you can survive a period of unemployment. As difficult as it may be, don't get discouraged. Be patient with yourself and with your job search. As with most things in life, this too shall pass. is a free personal finance and education site for women.

Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.

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