Unforeseen periods of unemployment can hurt households, both by making day-to-day living a challenge and by putting the brakes on a family’s hopes and dreams for the future.  The length of your unemployment depends on multiple factors, including the overall economy. Irrespective of experience and education, during times of economic contraction, recession, or depression, people remain unemployed for longer periods of time.

Fortunately, unemployment compensation can provide a temporary safety net until you find your next job.  In the short term, it is important to pay attention to your spending and make each dollar do the most work for you.  You will probably need to create a new budget.  To start, figure out how much money you need each month to cover the essentials in your budget (food, housing, utilities, etc.).  Collect your bills and identify the ones that must be paid every month. These expenses represent the absolute minimum that you will need in income each month.

Make a commitment to temporarily changing your lifestyle.  Eliminate any discretionary budget items.  There are other steps you can take depending on how long you think you may be unemployed. But, it is best to plan to be unemployed for three to six months.