Unemployment isn't fun, but there are ways to get through it financially and emotionally. The Dos and Dont's when you're unemployed.

Despite the economy doing a little better over the last decade, job loss and layoffs still happen. You may be a recent college grad struggling to land your first full time job or a seasoned work force veteran who was just on the wrong side of a corporate merger.

Here are a few tips to help you weather this period of unemployment.

Do: Tap your emergency fund

Hopefully, you’ve managed to save up a small nest egg for emergencies. Unemployment qualifies. If you haven’t saved up specifically for an emergency but did have some rainy day savings, or you were saving for a longer term goal like a new car or a down payment on a house, now is the time to tap those accounts. It’s better to buy a cheaper car or put off buying a house for a little longer than it is to rack up debt to pay your basic bills.

If you’re reading this article and you still have a job but don’t have an emergency savings account, now is the time to start building one. Even setting aside just $1,000 can make a big difference in an emergency and allows you a buffer that will help you get ahead in the long run.

Even if you can only set aside $5 a week, in about four years you’ll have $1,000 in the bank. There are even some great apps out there like Qapital and Dobot that will help automate your savings based on your spending patterns.

Don’t: Tap your 401(k)

Accessing your 401(k) before you turn 59½ is a terrible idea. You not only have to pay the state and federal taxes on the money, but you also incur a 10 percent early withdrawal fee. That means that if you withdraw $50,000 from your 401k, after 20 percent withholding for taxes and the 10 percent early withdrawal penalty, you’d be left with only $35,000.

Additionally, you lost the power of compound interest. According to this example over at Fidelity, let’s say you cash out a 401(k) at the beginning of your career with only $5,500 dollars in it. If you let it continue to grow throughout your career at seven percent annual return rate, by retirement 35 years later, you’d have $58,721. Not to mention that if you cash out that $5,500, you’d only get $3,850 after taxes and early withdrawal penalties.

Do: Find side hustles to stem the flow of your savings

Finding side work is easier than many people think and much of it can be incredibly flexible. While it probably won’t equal your previous income and is unlikely to come with any benefits, it can really make a big impact on the amount of money you have to tap from your savings during a period of unemployment.

You can look around your community for places hiring hourly workers. Working retail or in the service industry might not be glamorous, but those paychecks can help keep you afloat longer while you’re looking for your next full time job. They also have a high turnover rate, so it’s not usually too difficult to find an opening.

You can also find quite a few jobs online that will provide you with extra flexibility to take care of your kids or attend job interviews when you need to. If you have an internet connection at home, transcribing jobs with a company like Rev or freelance writing can provide you with a little extra side income.

Apps like Gigwalk or Pinata let you pick up some work while you’re on the go. If you have a car and a clean driving record, driving for Uber or Lyft can make you a decent hourly income and provide a great deal of flexibility too.

None of these things can replace a full time income with benefits, but when you’re unemployed every little bit helps.

Don’t: Put purchases on a credit card

It can be tempting to just continue your lifestyle as usual and put your purchases on your credit card – after all, paying the minimum amount is probably still doable for a while. However, even low interest credit cards still add up quickly, and if you have a rewards card, now is the time to cut that thing up. Reward cards can be amazing, but only if you can absolutely pay off the balance every month—the interest on them is astronomical.

If you find there’s no other way to pay your bills, look for a new credit card that offers 12 months of 0% interest, like the Blue Cash Everyday Card from American Express, and continue to do your best to minimize what you put on it.

Do: Re-evaluate your budget

If you’ve never made a budget, now is the time. If you currently have one, it probably needs to be reworked in light of your new income situation. It’s time to set up a bare bones budget and do your best to stick with it.

A bare bones budget isn’t a lot of fun, but it’ll keep your savings intact a lot longer. It eliminates unnecessary areas of your budget like clothing, entertainment, etc.

You should also reevaluate if you need to be spending as much as you are on “necessities.” Maybe it’s time to switch from Verizon to Republic Wireless. Maybe it’s time to cut the cable and just pay for a Netflix subscription.

Also keep in mind that your budget needs a new line now to accommodate job search expenses. While strolling Target and picking up a new shirt should be out, you may actually need to buy a new suit for interviews. If you need to pay for transportation to interviews, make sure to include that in your new budget.

Don’t: Keep spending on things you don’t need

We touched on this above, but now is the time to cut back on most of your extra spending. According to the Bureau of Labor Statistics, the average length of unemployment is about 25 weeks or nearly six months. If you’ve got a hefty emergency savings account, maybe you don’t need to make many changes to your lifestyle, but if you don’t, now is the time to drop any subscriptions, memberships or clubs that aren’t necessary for the time being.

All that talk about latte factors and little spending habits comes back into play and it’s time to cut back on them too. The more recurring costs that you can knock out of your spending, the longer your funds will last.

Do: Find hobbies/volunteer activities that are free

With all this talk about cutting back, getting rid of memberships and even, gasp, possibly cutting your cable, what are you supposed to do? Most communities have quite a few free activities and volunteer opportunities that may not only keep you busy, but also expand your network, without costing you anything.

It’s very easy to fall into a slump during a period of unemployment and keeping something like a normal schedule can really help make the days more manageable. Volunteering can allow you to build up new skills while passing the time. Many communities have volunteer opportunities at their local libraries or community centers. You may be able to volunteer with a first aid squad or fire department. There may be food banks or homeless shelters nearby. Even the local arts centers or historical societies may be looking for volunteers.

Don’t: Sit around depressed

Unemployment can be a really rough time emotionally. It can be so easy to fall into a state of depression. Staying busy with some of the suggestions above can really help, but sometimes the stress of unemployment can get to be a bit much.

If you need to talk to someone, you can often find free or inexpensive counseling through your church or the local YWCA/YMCA. If you live in an area with a large research hospital, you can check for free research studies you can sign up for, or if you live near a university, you can contact the psychology department and ask if they have free training clinics for their PhD students and find out how you can get involved.

Don’t forget that eventually this too will end. In the meantime, if you make smart decisions, you can minimize the damage to your bank accounts and your psyche during this time.


Unemployment sucks, there’s no doubt about that, but you can get through it. With your savings, cutting back on spending, and plenty of free activities, you can save while you’re browsing through the classifieds.

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About the author

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Mel Bondar is a personal finance blogger and stage manager from New Jersey. Her favorite topics include how to not totally panic over adulthood, working in the arts, and retirement strategies that don’t involve living in a cardboard box under an overpass.