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5 Money Moves to Make ASAP If You Lose Your Job

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Whether that pink slip comes as a total surprise or departmental layoffs have been looming for months, losing your job sucks—emotionally, professionally, and financially. It’s also incredibly common: Roughly 13 percent of U.S. workers think getting laid off is very likely or fairly likely to happen in the following year, according to a recent Gallup poll—and for workers under 29, that stat jumps to 18 percent.

“Going through these rough job transitions is totally normal, and most Millennials will go through it more than once in their careers,” says Sophia Bera, a certified financial planner and founder of Gen Y Planning.

Of course, going from making bank to making bupkis is enough to make anyone freak out—no matter how many times you’ve done it. But losing your job doesn’t have to spell financial ruin (or a diet of ramen noodles). The trick is to be proactive about slashing spending and stretching savings—as soon as you get the bad news. Here are the money moves to jump on:

1. FILE FOR UNEMPLOYMENT.

Let’s be real: Unemployment benefits aren’t going to cover all of your expenses. But now is the time to claim every penny of help you’re entitled to. The benefit formulas vary by state, but most are based on a percentage of your former salary, with a maximum weekly benefit. In Illinois, for instance, someone without kids will receive at least $50 a week and at most $426. In California, the range is $40 to $450 a week. Every state has its own website detailing how to apply for benefits, as well as who to contact with questions. Get clicking.

2. SHELVE YOUR STUDENT LOANS.

While you’re unemployed, you can put any federal student loans into deferment—that means you’ll be able to halt payments entirely until you find a new gig and the government will pick up the tab on any interest that accrues. Private student loans probably won’t be quite so generous, but you might be able to switch repayment plays so you’re paying less each month or move the loans into forbearance until you find work.

“People sometimes wait until they can’t make the monthly payment to call their student loan providers, but the last thing you want to do is default on your loans,” says Bera. That money blunder can wreck your credit and cost you even more in hefty fees and penalties.

3. CALL YOUR OTHER CREDITORS.

If you have a car payment or a credit card bill, jump on the phone and explain your situation. “All loan providers want to get paid, so they’re motivated to work with you to figure out a payment plan,” says Bera. “The first person you talk to might not have the authority to change the bill’s cycle length or lower your minimum payment, but if that’s the case, ask to speak with a manager.”

4. FIGURE OUT HEALTH INSURANCE.

COBRA is a short-term solution that lets you continue with your company’s chosen healthcare plan, typically at a higher monthly premium. But ponying up for COBRA isn’t always the best money move. If you’re younger than 26, you might be able to sign on to your parent’s insurance instead. (And if they’re already carrying your younger siblings, the add might not even cost them a premium increase.)

If you think this layoff might signal a good time to start a freelance business, you might want to comparison shop for coverage on your state’s Health Insurance Exchange. And even if you do find that COBRA is your best bet, there’s no rush. “You have 60 days from the day you lose your job to elect for COBRA,” says Bera. “And you can back-date coverage if something does happen, so for most people hoping to find a job right away, it makes more sense to wait.”

5. TIGHTEN YOUR (BUDGET) BELT.

Scrutinize your budget and cut out anything that’s not totally essential. That might mean swapping your pricey gym membership for free runs in the park or cutting the cable cord in favor of a Netflix subscription you split with your roommate. “Taking a serious look at your spending might also prompt you to make some tough choices, like not going to your friend’s wedding this summer,” says Bera. “Your friend might be mad at you at first, but tough. This is life, and s**t happens. It’s not worth putting a destination wedding on your credit card—especially if you don’t have a job.”

One unexpected perk of paring down your spending, she says, is that you might find you don’t miss the daily splurges nearly as much as you thought you would. That means when you do land your next job (and you will!), you can stick with the pared down budget and bank more of your new salary for savings.

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Before Bitcoin: The Rise and Fall of Flooz E-Currency
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In the late 1990s, Silicon Valley entrepreneur Spencer Waxman was in Morocco on holiday when he heard an Arabic slang term for money—flooz—that stuck with him. In the dot-com boom taking place back in the United States, URLs with obscure etymology were popular. When Waxman and partner Robert Levitan decided to co-found a novel way of disrupting the online commerce industry, calling it Flooz.com was almost a foregone conclusion.

What Levitan and Waxman envisioned was a virtual gift certificate that would drive business to participating online retailers, give consumers some sense of security over their private information, and make shopping for stubbornly gift-resistant recipients easy. Rather than merely offering cyber currency, this was a service with purpose.

Unfortunately, it was also one that was doomed to fail.

A screen capture of Flooz.com
Flooz.com

Non-cash currency has been with us since the Chinese used cowry shells to sort out debt for goods and services more than 3000 years ago. In the 1960s, credit cards became an alluring alternative to saving and carrying paper bills. When online retailing exploded in the 1990s, it was only natural that startups would begin to explore virtual payment methods.

At the time, digital transactions were perceived by many consumers to be a near-guarantee of identity theft. Handing a card to a vendor in a closed-loop retail environment was one thing, but the thought of hackers seizing their information once it was entered into the borderless environment of the internet kept many away from online shopping.

As it turns out, that paranoia would turn out to be justified in our current climate of constant data breaches. It was also good for businesses hoping to turn their apprehension over credit card security into a monetized solution. Flooz.com debuted in 1999, just one year after another currency-based URL, Beanz.com, had garnered press. Beanz were a kind of earned points system, with approved transactions gifting customers with redeemable gift vouchers. Flooz took a different approach: Customers would sign up to Flooz.com and purchase gift certificates for specific retailers, which they could then use themselves or pass along to a gift recipient via email.

For businesses, it was a way of driving traffic to sites; for consumers, it was a way to keep credit card transactions limited to one vendor; for Flooz.com, being the intermediary meant taking a 15 to 20 percent cut of completed transactions on the selected retail sites, which ranged from Godiva Chocolates to Barnes & Noble and Tower Records.

To help Flooz.com cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and Flooz.com money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using Flooz.com.

Whether it was Goldberg’s pitch or the concept itself, Flooz.com met with a receptive audience. The company debuted in the fall of 1999, and had opened 125,000 accounts by January 2000. That year, roughly $25 million in Flooz.com money was purchased and used. (In a nod to the impenetrable vocabulary of the internet at the time, the media loved to point out that Beanz could be used to purchase Flooz.)

Bolstered by the attention and early success, Flooz.com was eventually able to raise $35 million in venture capital. Consumers could meet their gifting obligations by emailing a code to their gift recipient without having to waste time shopping. For a time, it appeared Flooz.com would become a leading method of payment for online transactions.

Actress and Flooz.com spokesperson Whoopi Goldberg is photographed during a public appearance
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But it didn’t take long for the seams in the Flooz.com model to show. While gifting vouchers to family and friends was convenient for the gifter, the giftee was stuck with a very limited number of vendors that took Flooz.com as payment. If Amazon, for example, had a deal on a DVD or book that Barnes & Noble didn’t, Flooz users were out of luck. Shopping for a bargain wasn’t possible.

The second and most crippling detail was one Flooz.com was forced to make in order to strike deals with vendors. The company guaranteed its transactions, meaning that it would make good on orders even if Flooz dollars had been purchased via fraudulent means. By the summer of 2001, that commitment became a tipping point. Agents from the FBI informed Levitan that they suspected a ring of Russian hackers had purchased $300,000 worth of Flooz in order to launder funds from stolen credit cards.

This created a paralyzing cash flow problem: As their credit card processor withheld funds until Flooz.com could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for Flooz.com to reimburse them. Suddenly, customers trying to pay with Flooz were greeted with error messages that the site was down.

Those issues, coupled with the fact that corporate clients had already started to move away from gifting employees with Flooz dollars, forced Flooz.com to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. (Beanz.com was also a casualty of the dot-com bust, when participating retailers processing the points steadily went out of business.)

Levitan rebounded, founding the Pando file sharing network and selling it to Microsoft in 2011 for $11 million. Meanwhile, Flooz.com remains a barely-remembered footnote in e-currency, though it would be hard to chart the rise of digital funds like Bitcoin without it. Like with so many other good ideas, timing is everything.

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These Are the Top 25 U.S. Cities With the Lowest Cost of Living
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Coastal cities like New York and San Francisco bustle with excitement, but residents pay plenty of hard-earned cash to enjoy perks like Central Park and world-class museums—and to pay their sky-high rents. If you’d rather have a full bank account than a hipster ZIP code, consider setting down roots in America’s most affordable region: the Midwest.

Niche, a data analysis company, has ranked the 25 cities with the lowest cost of living across the United States—and the top 10 are all located in America’s heartland. Their selections were based on factors including access to affordable housing, food and fuel costs, and median tax rates, all of which were gleaned from U.S. Census and Bureau of Labor Statistics data.

Indiana was the most-represented state in the list’s top 10 section, with Fort Wayne, Evansville, and South Bend nabbing the first three spots. The remaining cities were mid-sized metropolitan areas in Kansas, Ohio, Iowa, and Illinois, all of which offer urban conveniences at a fraction of the cost of their coastal counterparts. After that, other cities in the mix included municipalities in Texas, Michigan, Alabama, South Dakota, and Minnesota.

Check out Niche's top 25 list below, and visit their website to view their methodology.

1. Fort Wayne, Indiana
2. Evansville, Indiana
3. South Bend, Indiana
4. Topeka, Kansas
5. Toledo, Ohio
6. Wichita, Kansas
7. Akron, Ohio
8. Cedar Rapids, Iowa
9. Davenport, Iowa
10. Springfield, Illinois
11. Rochester, Minnesota
12. Dayton, Ohio
13. Springfield, Missouri
14. Wichita Falls, Texas
15. Kansas City, Kansas
16. Odessa, Texas
17. Cleveland, Ohio
18. Indianapolis, Indiana
19. Abilene, Texas
20. Sioux Falls, South Dakota
21. Montgomery, Alabama
22. Lansing, Michigan
23. Des Moines, Iowa
24. Brownsville, Texas
25. Warren, Michigan

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