Here's how I budgeted while I was in between jobs

Myelle Lansat


Myelle Lansat

Myelle Lansat

News Editor

Myelle Lansat is a news editor at Policygenius, where she writes the Easy Money newsletter and covers insurance and personal finance. Previously, she was a personal finance writer at CNBC and Acorns, and a reporter for Business Insider.

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You never know when you're going to lose a job but it’s good to know that your employer’s tax dollars can protect you from financial stress.

About three months ago my work contract with a previous employer ended. As a single woman living in New York City, my mom suggested I sign up for New York’s unemployment insurance benefits. I was hesitant at first. I didn’t know if that would hurt me in the long run, like adding me to a list of people who collected unemployment. Plus, I had an emergency fund that I thought would cover me for three months of unemployment. It didn’t take me long to realize that was not the case. I needed financial help if I was going to continue living in the city while I looked for a new job.

To qualify for unemployment insurance benefits I had to disclose how I lost my job and how much I was making at the time. New York’s Department of Labor approved my claim and awarded me more than $500 per week, excluding taxes. I elected for each deposit to take out taxes, giving me about $440 per week.

What are unemployment benefits & am I eligible?

Unemployment benefits are like a safety net under a trapeze — they’re there to catch you if you unexpectedly fall. So if you quit your job, you probably won't be eligible for the benefit. But if you lost your job unexpectedly, say because your company went under or your contract ended, you will likely qualify for unemployment insurance benefits.

Each state has unemployment insurance payment programs that give you money on a weekly basis. The first step is completing a roughly 30-minute questionnaire to see if you meet your state's qualifications. My biggest tip: Take your time answering it. Some questions are tricky and one wrong answer can disqualify you from the program. For example, you may see a question like, “How many days were you not ready, willing, and able to work?” The key words there are “not ready.” If you are accepted, you will have to fill out a similar questionnaire on a weekly basis to claim your benefits.

How my budget shifted on unemployment

My biggest budget shift was really a mindset shift. Getting paid $440 a week for doing nothing may sound like a lot but it doesn't give you much wiggle room for anything other than bills and rent. Especially when you’re used to having roughly $1,500 deposited into your checking account every other week.

I learned to adjust my spending and savings so I could pay my living expenses and still have a glass of wine at dinner. My first priority was saving at least $200 per week for rent. I used the remaining balance to pay off any credit card debt from the week before which averaged around $200 and mostly consisted of food, bills or transportation. Any money I had left over from the week was put back into my emergency fund.

Why you should jump on unemployment benefits

A common misconception about unemployment benefits is where the money comes from. Sorry to burst the bubble but taxpayers do not pay for unemployment benefits — your employer does. So there’s no need to feel guilty about accepting the money.

My initial hesitation about unemployment benefits ended up costing me. It can take your state’s Department of Labor a few weeks to assess your eligibility for unemployment benefits. The longer you wait to file a claim, the longer it takes to get the money. I realized my brief hesitation was actually shame creeping up on me after my contract ended. But there is no shame in taking unemployment benefits if you need them.

Was it worth it?

Heck yes! One week without the $440 would have put me into debt — and it did. The New York Department of Labor requires unemployment beneficiaries to attend career meetings to help get you back into the workforce. I unfortunately missed one appointment notification and ultimately the meeting, which put a pause on my weekly benefits. The only way to reinstate unemployment benefits is physically going to the Department of Labor office and rescheduling. Once I did that my benefits were back on track, but I was a week behind, throwing off my budget and putting me into debt.

I was able to get back on track after a month with a little extra discipline and cutbacks (no more wine with dinner). Unemployment benefits are extremely helpful in tight financial situations but my emergency fund was the biggest reason why I was able to stay afloat for the three months I was unemployed.

Want to know how to start an emergency fund? Read our guide to emergency savings accounts.