You Can Rely on Unemployment Insurance if You're Laid Off
Unemployment insurance (UI) is a government program that provides financial assistance to you when you don't have a job and you're actively seeking one. Like severance mentioned earlier, UI is designed to help you bridge the gap financially while you look for work. So, you can rely on collecting unemployment insurance to keep your budget on track, right?
Possibly, but chances are you'll need to make some other changes, too.
Laws are different in each U.S. state for how you qualify to receive UI and how much you can receive. Typically, this is some percentage of the average amount you've made over the last five quarters of work, disbursed over a certain number of weeks [source: U.S. Dept. of Labor]. You can also file for extensions if you can prove you've been unable to find employment and haven't turned down any offers.
Remember that UI is just insurance, not an income replacement. If you're living paycheck-to-paycheck, and you don't have much in savings, you'll have to trim your budget to make up for the drop in income. If you have school loans, you might apply for forbearance so you don't have to pay for a few months. Plus, collateral-secured loans like a car loan may have a limited-use option to move one of your payments to the end of the term. Other things you can cut back on are entertainment and dining out.