Can Unemployment Benefits Run Out?

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Unemployment benefits are intended as a temporary measure to help you financially when you are between jobs. Generally, unemployment benefits last 26 weeks, but that might vary depending on your state.

That means that there's a chance that your benefits might run out before you secure another job. Here's what to do if that happens.

Tighten Your Budget Before Unemployment Runs Out

As soon as you lose your job, it's wise to create a new, bare-bones budget. This bare-bones budget should cut out all non-essential spending. Cancel unnecessary services such as cable or a gym membership, scale back on your grocery bill, and cut going out to dinner or with friends.

You may receive both a severance package and unemployment benefits that will help you meet your current financial obligations. But you'll still need to make your savings, emergency fund and other money last as long as possible, in case your benefits end before you find another job and you need to dip into your savings or emergency fund.

Don't immediately dip into your emergency fund. Instead, try to live on your unemployment benefits and any potential severance packages in case your benefits run out before you find new work.

What to Do When Your Unemployment Runs Out

If you are close to losing your unemployment benefits, you need to create an action plan to fall back on. It means an even tighter budget with additional plans on what to do for housing, plus to cover your car payment and other expenses.

If you are renting, you may try to get out of the lease and explain that you are unemployed. You may choose to have a roommate come to help share expenses, or you may choose to move home temporarily while you look for work.

Take on Part-Time or Temporary Work
Additionally, you may consider picking up part-time or temporary work to help you out while you are continuing to search for a job. You may begin freelancing in your field and discover that you can make a lot of money doing that. Just be sure to plan for taxes come next year, as you'll be responsible for paying taxes if you earn enough.

You may also find that you can pick up odd jobs to help supplement your income. Once your unemployment benefits have run out, you may have to take on a part-time job indefinitely in order to meet your financial obligations.

Get Help Looking for a Job
It is easy to become discouraged in a difficult job market, but eventually, you should be able to find a job. Considering expanding the field that you are looking in, as well as the geographic location. You may be able to find a great job in a different state or city.

If you are not getting any interviews, take a seminar on resume writing or meet with an interview coach.

If you are getting to the interview stage, but you are not receiving any offers, you need to get help with your interviewing techniques. Look for help with this through your local unemployment office. They can still offer you help with looking for a job even if you do not qualify for weekly benefits. It is important to continue to be proactive until you find a job.

Contact Your Creditors
If you are unable to make your monthly payments, you should contact your creditors. Your student loan can be put on deferral if you are unemployed, and you should do this as soon as you lose your job. While your creditors can still report you to collections when you fail to pay, you may find additional help or assistance while you are unemployed if you contact them. If you are proactive, you may be able to save your credit while you struggle through this.​

Take Advantage of Help Available
There are emergency programs in place to help you cover the costs of food and your rent through each county. If your unemployment runs out, you will likely qualify for food stamps. You may also qualify for child care assistance while you are looking for a job as well as help with rent or utilities.

You do not know what you will qualify for until you apply, and it is worth the time to visit your local office to find out what help you can get while looking for a job. Additionally, you may want to look into local food pantries in your community that can help you.

Article Sources

  1. Center on Budget and Policy Priorities. "Policy Basics: How Many Weeks of Unemployment Compensation Are Available?" Accessed Jan. 29, 2020.

  2. IRS. "Independent Contractor (Self-Employed) or Employee?" Accessed Jan. 30, 2020.

  3. Federal Student Aid. "Get Temporary Relief." Accessed Jan. 29, 2020.

  4. U.S. Department of Agriculture. "WIC Eligibility Requirements." Accessed Jan. 29, 2020.

  5. Benefits.gov. "Child Care and Development Fund." Accessed Jan. 29, 2020.