Comments on: Does Unemployment Income Change How Much You Save for an Emergency? http://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#utm_source=rss&utm_medium=rss&utm_campaign=does-unemployment-income-change-how-much-you-save-for-an-emergency A personal finance blog teaching you how to live debt free and use credit wisely. Fri, 10 Feb 2012 15:18:07 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Rogerhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-18419 Roger Thu, 23 Apr 2009 05:03:38 +0000 http://www.nodebtplan.net/?p=2532#comment-18419 They're not so much awesome benefits (they cover less than half of the gross salary I was making at my last position); I just live rather cheaply :) They’re not so much awesome benefits (they cover less than half of the gross salary I was making at my last position); I just live rather cheaply :)

]]> By: Kevinhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-18402 Kevin Thu, 23 Apr 2009 02:46:23 +0000 http://www.nodebtplan.net/?p=2532#comment-18402 @Roger: Wow, those are some awesome benefits. I wonder how many states are like that... the one I live in definitely is not. @Roger: Wow, those are some awesome benefits. I wonder how many states are like that… the one I live in definitely is not.

]]> By: Rogerhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-18274 Roger Wed, 22 Apr 2009 04:52:53 +0000 http://www.nodebtplan.net/?p=2532#comment-18274 I'm going to play devil's advocate here, and say that yes, unemployment income should affect how much you save for emergencies. An emergency fund is supposed to cover expenses above and beyond what can be covered by other income. If you were working two part-time jobs and lost one of them, the continued income from the other would still be incorporated into your budget. Having the second job would give you extra security, in much the same way as unemployment, and mean that you could lower the size of your emergency fund. All of that said, I will admit to being rather biased: I don't live in a right-to-work state, my former employer had no history of fighting employees seeking unemployment, and my current benefits more than cover my regular expenses (including health care) with enough left over to continue building up my emergency fund (in case I am still unemployed a year from now). Given different circumstances, I probably would have acted under the assumption that I wasn't going to be getting any unemployment, as well. I’m going to play devil’s advocate here, and say that yes, unemployment income should affect how much you save for emergencies. An emergency fund is supposed to cover expenses above and beyond what can be covered by other income. If you were working two part-time jobs and lost one of them, the continued income from the other would still be incorporated into your budget. Having the second job would give you extra security, in much the same way as unemployment, and mean that you could lower the size of your emergency fund.

All of that said, I will admit to being rather biased: I don’t live in a right-to-work state, my former employer had no history of fighting employees seeking unemployment, and my current benefits more than cover my regular expenses (including health care) with enough left over to continue building up my emergency fund (in case I am still unemployed a year from now). Given different circumstances, I probably would have acted under the assumption that I wasn’t going to be getting any unemployment, as well.

]]> By: Kevinhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17948 Kevin Sun, 19 Apr 2009 18:01:52 +0000 http://www.nodebtplan.net/?p=2532#comment-17948 A bit late in responding to these comments. My apologies -- been quite busy! @Cathy: You are spot on. There are many ways the unemployment benefits could be denied or slowed down. It isn't a sure thing. @Finance Nerd: Good point with the health insurance issue. Hopefully if you are married then you could switch to the spouse's insurance, but of course that depends on the situation. @Hot Money Mess: Thanks for stopping by! :) @tom: Exactly. That's why it helps to have a budget/plan. @Diane: I agree -- see the unemployment as additional cushion to help stretch that fund out as far as possible, but not seeing it as a sure thing. @Golfing Girl: Great phrase! I completely agree about social security. Will be happy if it is there, but not relying on it at all. A bit late in responding to these comments. My apologies — been quite busy!

@Cathy: You are spot on. There are many ways the unemployment benefits could be denied or slowed down. It isn’t a sure thing.

@Finance Nerd: Good point with the health insurance issue. Hopefully if you are married then you could switch to the spouse’s insurance, but of course that depends on the situation.

@Hot Money Mess: Thanks for stopping by! :)

@tom: Exactly. That’s why it helps to have a budget/plan.

@Diane: I agree — see the unemployment as additional cushion to help stretch that fund out as far as possible, but not seeing it as a sure thing.

@Golfing Girl: Great phrase! I completely agree about social security. Will be happy if it is there, but not relying on it at all.

]]> By: Golfing Girlhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17542 Golfing Girl Wed, 15 Apr 2009 18:58:08 +0000 http://www.nodebtplan.net/?p=2532#comment-17542 I totally agree. Unemployement is a chicken that hasn't hatched. I apply this approach to my retirement goals as well and do not include my pension or social security--those will be the "perks" you mentioned or will cover unexpected expenses in my retirement. I totally agree. Unemployement is a chicken that hasn’t hatched. I apply this approach to my retirement goals as well and do not include my pension or social security–those will be the “perks” you mentioned or will cover unexpected expenses in my retirement.

]]> By: Dianehttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17541 Diane Wed, 15 Apr 2009 17:49:57 +0000 http://www.nodebtplan.net/?p=2532#comment-17541 I mentioned this in a comment recently about having a 6 month e-fund, but considering the addition of unemployment benefits to your income. I finally have a 6 month emergency fund in place and I intend to keep it there. However, it does offer me some relief to know that if I were unemployed I would very likely receive unemployment benefits, which would stretch my fund to several additional months. I would not recommend spending down the e-fund in anticipation of unemployment benefits, but would regard the unemployment funds as a possible additional cushion. I mentioned this in a comment recently about having a 6 month e-fund, but considering the addition of unemployment benefits to your income.

I finally have a 6 month emergency fund in place and I intend to keep it there. However, it does offer me some relief to know that if I were unemployed I would very likely receive unemployment benefits, which would stretch my fund to several additional months.

I would not recommend spending down the e-fund in anticipation of unemployment benefits, but would regard the unemployment funds as a possible additional cushion.

]]> By: tomhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17509 tom Wed, 15 Apr 2009 13:03:31 +0000 http://www.nodebtplan.net/?p=2532#comment-17509 Even if you were to count on the umemployment income, what are you doing with the money that you could have saved? Are you just spending it on anything and throwing it away instead of putting it to good use. I mean you can save, put into retirement savings, start a business, etc. Even if you were to count on the umemployment income, what are you doing with the money that you could have saved? Are you just spending it on anything and throwing it away instead of putting it to good use.

I mean you can save, put into retirement savings, start a business, etc.

]]> By: Hot Money Messhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17440 Hot Money Mess Tue, 14 Apr 2009 21:05:51 +0000 http://www.nodebtplan.net/?p=2532#comment-17440 Hey I heard about your blog on Poorer Than You and decided to come check it out...I wish I could have been more like you about college money management! Hey I heard about your blog on Poorer Than You and decided to come check it out…I wish I could have been more like you about college money management!

]]> By: Finance Nerdhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17430 Finance Nerd Tue, 14 Apr 2009 17:53:35 +0000 http://www.nodebtplan.net/?p=2532#comment-17430 Another consideration is that he will now likely have to pay his own health insurance, which he can use the unemployment money to cover. Those expenses aren't really included in his monthly minimum, so he really needs more than he thinks, and unemployment might cover that difference. Another consideration is that he will now likely have to pay his own health insurance, which he can use the unemployment money to cover. Those expenses aren’t really included in his monthly minimum, so he really needs more than he thinks, and unemployment might cover that difference.

]]> By: Cathyhttp://www.nodebtplan.net/2009/04/14/does-unemployment-income-change-how-much-you-save-for-an-emergency/#comment-17423 Cathy Tue, 14 Apr 2009 15:34:49 +0000 http://www.nodebtplan.net/?p=2532#comment-17423 Relying on unemployment income is a bad bet. In Washington state, an employer can contest your unemployment benefits, which will delay your receiving a check. They are also an at-will state, which means you work for an employer at your own will. They also employ you at their own will. They can fire you at any time, with or without cause, and contest your unemployment benefits. Relying on unemployment income is a bad bet. In Washington state, an employer can contest your unemployment benefits, which will delay your receiving a check. They are also an at-will state, which means you work for an employer at your own will. They also employ you at their own will. They can fire you at any time, with or without cause, and contest your unemployment benefits.

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