Financial Advice and Tax Tips for Job Seekers
Financial advisors strongly agree that you should have at least two months salary set aside in an “emergency fund”. If you have an emergency fund, tap into it only when you must and remember to make it stretch as long as possible. If you don’t have an emergency fund, don’t feel bad; you’re not alone. However, you should create one as soon as you get a new job. Start by setting aside ten percent of your net income each paycheck until you reach your goal.
Structure Your Finances
Spending less than you earn is just good financial sense, but if you are going through a transitional period, it is even more important. Some people may find the thrifty lifestyle restrictive, but it will actually give you more freedom and cause less stress.
If you are facing a dip in your income, it may feel like you can’t do anything about it financially. Fortunately, that isn’t true. Begin by tightening your belt. And I mean really tightening it. Evaluate and cut down on your level of spending. Again, be brutal. Everything can be cut, from how often you eat out to your level of entertainment to how much you spend on housing to where you shop. At all costs, avoid consumer debt. If you can’t resist using your credit card, hide it, destroy it, do whatever it takes. Credit debt can takes years to overcome. You don’t want to leap from one financial mess to another.
Track Your Expenses
If you are searching for a job in your current (or recently current) field, your expenses are tax deductible. Even if you don’t get the job you seek, you can still deduct the expenses related to your search. For example, say you are a pastry chef in Boston, but what you really want to do is decorate wedding cakes in Los Angeles. You take some classes and fly to California for a couple of interviews, your schooling and travel expenses are tax deductible- even if you don’t get the job. Keep in mind this usually only works with something in your career field. If you are a pastry chef and you want to become a rodeo clown, you might want to check with a tax professional before itemizing.
Internet service, newspaper subscriptions, trade journals, self-help books, professional resume writing services, career counseling, schooling, memberships, and anything else that you use to search for a job or assist you in getting a job is tax deductible. This also applies to the clothes you need for interviews. Once you get the job, uniform or wardrobe expenses can be deducted as well.
State and Federal Programs
State and Federal programs are often underutilized by people who consider them charity. These programs aren’t pity parties. They are there for jobseekers who need them. There are programs for continuing education, career development and training, aspiring business owners, etc. Take advantage of them while you are off work. You will become more desirable as an employee because of it.
Think About Relocation
Evaluate your relocation options. Compare not only salaries and benefit packages, but also the cost of living between locations. This includes housing expenses, utilities, food costs, gas costs, state income and property taxes, and any other major expenditure you can think of. Always make sure you carefully consider the financial consequences of moving or staying.
Also keep in mind that unreimbursed relocation expenses are often tax deductible. You can itemize scouting expenses, packing supplies, moving services and equipment, and much more. As with everything else, make sure you keep careful records and receipts.
