Friday Free Stuff: Free Suits

Dressing appropriately for a job interview is important, but what can you do if you don't have a suit and can't afford to buy one?  Be on the look out for free suit giveaways in your area.  A few months ago, a barber in the Seattle area (Flint Men's Grooming) was giving away gently used suits and providing free men's grooming for the unemployed.  I called for an appointment, but they were fully booked within a few minutes of announcing this amazing free offer.  

There is also a charity organization called "Dress for Success" that provides professional attire to disadvantaged women.  They serve clients by referral only from certain non-profit and government agencies, so definitely take advantage of this service if it is offered to you.

Good luck finding your free suit!

Tax Saving Tip #1: Donate Stuff You Don't Need

In yesterday's post I suggested selling stuff that you don't need to make some extra cash. You may find that some of your stuff is just unsellable (like those old 'N Sync CDs) so you should go ahead and donate it to a worthy charity. Not only is this a great way to help out those less fortunate than yourself and reduce clutter, but you can also get a tax deduction for donations to qualifying charities.  Here are a few key points to be aware of if you want to claim the deduction:

• You must be eligible to itemize your deductions.
• The donation needs to be to a qualified tax-exempt organization.  You can determine if an organization is qualified by searching Publication 78 on the IRS website.
• You can deduct the "fair value" of the property donated.  For used clothing and household items, the fair value will generally be a lot less than what you originally paid for the items.
• Keep records of your contributions.  Many charities provide receipts for donated items, so file these somewhere safe. Refer to Publication 526 on the IRS website for more information on the documentation required to substantiate your contributions.
• You will need to complete IRS Form 8283 if you wish to claim a deduction for noncash contributions that total over $500 for a particular year.
• Your donation deduction cannot exceed 50% of your adjusted gross income for the year.  

You have until December 31 to donate if you want to claim the deduction in this tax year.  So go ahead and donate to your favorite charity.  Who knows, your contributions may even help brighten up someone's Christmas!

Money Making Tip #1: Sell Stuff You Don't Need

Extra cash always comes in handy when you're unemployed. When you sell stuff you don't need, not only do you make money, but you can also unclutter your living space which can be particularly liberating experience. Start by walking round your home and looking for stuff that you don't use or don't like. I've found that you can sell all kinds of things including clothes, toys, electronics, furniture, computers, appliances, tools, books, etc.

Selling stuff online is really quite easy once you get the hang of it.  I use ebay for goods that I am happy to ship to customers and craigslist for bulkier items for which the shipping cost would be prohibitive.  With the ebay auction website you can reach customers all over the world, though the site does charge an insertion fee for listing an item and a final value fee for a listing that sells.  Craigslist is a classified ad site that groups ads by locality and is suitable for reaching potential customers that live nearby.  The major benefit of craigslist is that it is free to post ads (with certain exceptions including job posts, New York brokered apartments, and adult services).  You can also use more traditional methods of selling such as holding a garage / yard sale, posting ads in a local newspaper or trade magazine, or selling at the local flea market.

Happy selling!

Money Saving Tip #1: Lose The Landline

A good way to cut your monthly expenses is to get rid of your landline phone.  I got rid of mine four years ago and haven't missed it at all.  My cellphone and high-speed internet connection are all I need to stay in contact with friends, family, and potential employers.  Click here for my post on using Skype to make free video calls to other Skype users via your computer.  Ditching your landline should save you around $20 per month.  Do it!

Positive Quote For The Week

Monday tends to be the worst day of the week whether you are working or not.  I want to try and change that by providing you with an inspirational, positive, or otherwise helpful quote. Today's quote comes from Lucius Annaeus Seneca, a Roman Stoic philosopher:

"A gem cannot be polished without friction, nor a man perfected without trials." 

So this week, try to perceive the trials of your unemployment as actually helping you to develop as a person. The benefits of unemployment may not be obvious, but maybe you are developing strength of character, or learning a new skill, or appreciating different aspects of life that you neglected when working.  It may seem tough right now, but some day you'll look back and be thankful!

Friday Free Stuff: Free Long Distance And International Calls

If you're like me have have friends any family across America or around the world, you will want to keep in touch with them during your unemployment. They will want to know how your job search is going and some of them may even be able to recommend you to potential employers. Concerned that you can't afford to make long distance calls, let alone international ones?  Don't be. There's a way to use your computer to make video and voice calls over the internet for free!  And you don't even need a phone!  

I've been using Skype for over a year now to make free video and voice calls across the US and to countries as far away as New Zealand.  You can use Skype with your broadband internet connection to call anyone who also has Skype.  Now most of my friends and family are using Skype, so I no longer have to pay to talk to them.  It really is a fantastic service.  You can also use it to call landlines or cellphones, though Skype does charge for this (the rates are very low).

Here's what you'll need to use Skype:

1. Computer connected to the internet

You'll need either a PC or Mac to run the software on, plus a broadband internet connection.

2. Microphone and speakers

So you can communicate with your friends and family.  Some computers have a built-in microphone and speakers.  If you don't already have a microphone and speakers, you'll need to buy them.

3. Webcam
So your friends and family can see you!  Again, your computer may already have a webcam built-in, otherwise you can buy a decent one for less than $100.

4. Skype software

The software to run Skype can be downloaded free of charge from their website, by clicking below:

Beat Unemployment Stress With Exercise

If you've been unemployed for any period of time you know that it can be a stressful experience.  When you are stressed your adrenal cortex produces more of the hormone cortisol, which is known as the "stress hormone".  Cortisol is secreted into the bloodstream naturally as part of our evolutionary "fight or flight" response to danger or stress, however, sustained high levels of cortisol can have a number of adverse effects such as increased blood pressure, impaired cognitive performance, weakened immune system, osteoporosis, and increased abdominal fat.

During exercise, cortisol levels may temporarily rise, but if you maintain a regular exercise program your body will adapt by producing lower levels of cortisol. Exercise also stimulates the production of "feel-good" hormones such as endorphins. Researchers at Duke University determined that just 30 minutes of exercise a day can significantly reduce the symptoms of stress.  Of course, there are many other health benefits of proper exercise such as lower risk of heart disease, improved cardiorespiratory fitness, prevention of weight gain, and lower risk of certain cancers. The U.S Department of Health and Human Services has written an excellent set of physical activity guidelines which you can access for free by clicking the link below:
2008 Physical Activity Guidelines for Americans

So how do you go about exercising if you are unemployed and short of cash? Here are some ideas for exercising on a budget:

1. Get moving
If you own a pair of running shoes, then you have all the equipment you need for running, jogging, or brisk walking.  These are all great forms of cardiovascular exercise.

2. Heavy stuff
Want to weight train but cant afford a set of weights or gym membership? Get creative and make your own weights.  I've exercised before with hefty accounting textbooks (at least they get used for something!) but you can also use plastic milk containers filled with sand or whatever else is lying round your home.

3. Used equipment
Many people buy exercise equipment with good intentions but somehow lose the motivation to put it to good use. For this reason you can find all sorts of used equipment at cheap prices. Try garage sales, thrift stores, and craigslist. I picked up a complete home gym on craigslist for just 50 bucks!

4. Discounted gym memberships
Going to the gym is the one of the more expensive exercise options, but there are ways you can lessen the financial impact. Be on the lookout for free trials and discounted memberships.

Can I Travel While Receiving Unemployment Benefits?

Yes, you can travel and receive unemployment benefits under certain circumstances. You are required to be ready for work and actively seeking work in order to continue receiving unemployment benefits, which means travel for the purpose of finding a job is allowed. It is best to keep a log of your job searching activities while out of state so that you have some evidence. Also, some states will allow you to travel and continue to claim benefits in other situations, such as travel to a funeral of a family member or travel for a required medical procedure.

I haven't done any major travel since becoming unemployed, though I have gone on short trips (less than a week) to Portland, San Francisco, Vancouver BC, and Yellowstone National Park.  I had no problems receiving unemployment during these short trips, but it could be a different story if you plan to sit on a beach in Costa Rica for three months.

Check with your state's unemployment office if you will be gone for more than a week as there may be certain state-specific requirements that you need to adhere to. Click here for a table of links to each state's frequently asked questions on unemployment benefits.

How Long Can I Claim Unemployment Benefits?

There are two key factors that affect the number of weeks that you can claim unemployment benefits:

1. The state that you claim benefits from

2. The date of your original claim

Most states provide unemployment benefits for 26 weeks.  There are also multiple tiers of federal emergency benefits and extended benefits that you may be eligible for depending on your original claim date and whether you have exhausted the previous tier of benefits.  For example, if your started claiming unemployment benefits from the state of New York between May 1, 2006 and June 23, 2008 you can receive up to 93 weeks of payments as follows:

26 weeks of regular unemployment benefits
20 weeks of Tier 1 emergency benefits
13 weeks of Tier 2 emergency benefits
20 weeks of extended benefits
14 weeks of additional emergency benefits
= 93 weeks total

If your claims began more recently (after June 22, 2009), you will only be eligible for the regular 26 weeks of unemployment benefits.  Your state's unemployment office should be able to provide you with the specific details on benefit duration. Click here for a table of links to each state's frequently asked questions on unemployment benefits.

What Should I Do With My Severance Pay?

Severance pay could be the biggest paycheck you ever receive, so think very carefully about what you are going to do with it. You may be tempted to go on a wild spending spree with this money, but I would advise against it.  Use the money wisely.

First, pay off any credit card balances you have.  Interest rates are typically very high on credit cards so you will benefit in the long-run if you can get your balances down to zero.  Start with the card balance with the highest interest rate and work your way down.

Secondly, think about making purchases that will help you start making money again, whether it be from employment or starting your own business.  If you will be looking for a job, ask yourself the following questions to determine what you need to buy:

• What clothing will I need for interviews?  Do I need a new suit?
• Can I get to in person interviews?  What public transport options are available?  Do I need a car?  
• Am I physically residing in the place where I want to get a job?  Should I consider moving?  What expenses will be involved?

Consider the following if you plan on starting your own business:

• Can you operate your business from your home? Or do you need to rent or purchase premises for your business?
• Do you need equipment?  Inventory?  A vehicle?
• What licenses or permits do you need?  Do you need to pay fees to form a company?

Finally, if you have have any severance money left over you should save it.  Your period of unemployment may be long and it can be reassuring to have some cash in the bank for emergencies.  See my previous post about how you can get a good interest rate and a bonus $25 when you open a Orange Savings Account with ING DIRECT.

Friday Free Stuff: $25 bonus from ING Direct

We often find ourselves short of cash during unemployment, so each Friday I will provide ways of obtaining free stuff, whether it be goods, services, or cold hard cash!

This week's offer is for a free $25 from ING DIRECT when you open an Orange Savings Account and deposit $250.  I personally opened an account with ING DIRECT back in August and received a $25 bonus right away.  They are an online bank and the entire account opening process can be performed online without any paperwork!  ING's interest rate is also very competitive (currently 1.3% annual percentage yield).  I highly recommend this bank, especially when you can get $25 for free!

This is how the offer works:

• This a referral offer so send me an email at paulnrobertson@gmail.com if you are interested and I will send you the referral link to receive the free $25 (please use the first link in the email)
• You have 30 days to use the referral link
• The $25 bonus is only available to new customers opening a new account as a primary owner
• When you open a new account with at least a $250 deposit you will receive the $25 bonus
• I will receive $10 for referring you
• I only have 25 24 referrals available, so email me as soon as you can!

Are Unemployment Benefits Taxable?

The Bad News

Yes, unemployment benefits are considered to be income and are subject to federal tax.  I know it seems like the government is giving with one hand and taking back with the other, but that's how they roll.

The Good News

Fortunately, the American Recovery and Reinvestment Act (aka "the stimulus package") does provide some tax relief to unemployment benefit recipients.  For the 2009 tax year the first $2,400 of benefits will not be taxed by the IRS.  See following article on the IRS website for further details:

http://www.irs.gov/newsroom/article/0,,id=205633,00.html

Advice

Elect to have federal taxes automatically withheld from your weekly unemployment payments in order to avoid a big tax bill when you do your taxes.  The 10% withholding can be setup when you apply for unemployment benefits or at any time while receiving those benefits. Alternatively, you could elect to make quarterly estimated tax payments, however, this is more time consuming than the withholding option.

The state will provide you with Form 1099-G which shows your taxable benefits and amount of withholding for the year.  You will then use these figures when preparing your tax return to the IRS. You should receive Form 1099-G by January 31, 2010.

Am I Eligible For Unemployment Benefits?

One of the first things you should do after becoming unemployed is submit your application for unemployment benefits.  There can be a delay of a few weeks from submitting your application to receiving your first payment, so get on it right away.

The quickest and most efficient way to apply is via the internet. Some states do offer other methods of applying such as by phone or in person, but these are too time consuming.  There are a number of websites out there that offer to assist you in applying for unemployment benefits for a fee.  DO NOT USE THEM! Applying for unemployment is really quite simple if you follow the rules as posted on your state's website.  Here are some basic eligibility requirements for unemployment benefits:

• Previous work and earnings: you must have worked and been paid wages in at least two calendar quarters in your base period (generally the first four of the last five completed calendar quarters prior to your claim).  Each state has a minimum amount that you must have earned during your base period.

• Circumstances of employment termination: in general, you will only be eligible for unemployment benefits if you lost your job through no fault of your own.

• Seeking work: you must be ready, willing, and able to work, and actively seeking work.  Some states may require you to keep a log of your job searching efforts or to attend workshops related to finding employment.

• Authorized to work in the United States: you do not have to be a US Citizen to claim unemployment, but you must be authorized to work in the US.  Illegal immigrants are out of luck.

The eligibility rules do vary by state so I have prepared a table with links to the Frequently Asked Questions on each state's unemployment office website.  I have also included the maximum weekly unemployment benefit amount payable by each state:

State (click to go to state website Frequently Asked Questions)	Gross Maximum Weekly Benefit  (assuming no dependents)
Alabama	$255
Alaska	$370
Arizona	$240
Arkansas	$409
California	$450
Colorado	$487
Connecticut	$519
Delaware	$330
District of Columbia	$359
Florida	$275
Georgia	$330
Hawaii	$545
Idaho	$362
Illinois	$385
Indiana	$390
Iowa	$374
Kansas	$423
Kentucky	$415
Louisiana	$258
Maine	$356
Maryland	$410
Massachusetts	$629
Michigan	$387
Minnesota	$585
Mississippi	$235
Missouri	$320
Montana	$407
Nebraska	$308
Nevada	$362
New Hampshire	$427
New Jersey	$584
New Mexico	$455
New York	$405
North Carolina	$505
North Dakota	$431
Ohio	$372
Oklahoma	$392
Oregon	$507
Pennsylvania	$547
Rhode Island	$528
South Carolina	$326
South Dakota	$285
Tennessee	$275
Texas	$392
Utah	$444
Vermont	$450
Virginia	$378
Washington	$611
West Virginia	$424
Wisconsin	$363
Wyoming	$438

Termination Day and Severance Pay

The day that you find out that you've lost your job can be an emotional one.  Take a couple of deep breaths and try to stay composed.  You don't want to do a Jerry Maguire and "flip out". Rise above it all and be as gracious as possible.  Don't burn your bridges because the relationships you have built at your job may come in handy in future.

If you are entitled to severance pay, you should do what you can to maximize the amount you receive.  Your employment contract should state the amount you are entitled to, but don't assume that you can't get more than what is stated in your contract.  Although you don't have a lot of leverage to negotiate, you also don't have anything to lose (you've already lost your job!).  Aim to make an emotional appeal to your boss for a bigger severance package.  Mention the years of service you've dedicated to your job, the number of kids you have to feed, and the dire economy which could mean months of unemployment.  Many employers understand the value of parting on good terms since former employees can become future customers.  I was lucky when I lost my job - my employer doubled the severance package that I was entitled to!