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Dear Dave,

We’ve been following your plan for a while. We’re debt-free, except for our home, and we have six months of expenses set aside in our emergency fund. Recently, I lost my job. I’m luckier than some, because I received a generous severance package from my previous employer, plus my wife still has a good job. My parents always raised me to take care of things myself and not rely on others. I suppose it’s because of this I feel a little guilty about filing for unemployment compensation. Do you think there’s anything morally wrong with accepting unemployment benefits?

Brandt

Dear Brandt,

I really appreciate your self-sufficient attitude. I don’t know what happened at your last job, but I’ve got a feeling you’re a hard worker and a decent guy. I’m sorry you and your wife are having to deal with this kind of situation.

The Social Security system in this country is a mathematical failure. But that doesn’t mean I’m not going to take my money when I deserve it. The government took it from me in the first place, so I don’t have a problem with accepting something I’ve already paid into.

Now, I’ll throw out a warning here. Sometimes when people start receiving unemployment benefits, it causes them to take their foot off the gas. The idea that “free” money is coming in can help them rationalize sitting at home on the couch, instead of working hard to find another job and being extra careful with their finances. I’m not hearing that kind of mentality from you, though. And it’s obvious you and your wife have been pretty smart with your finances.

One more thing I’d suggest is making sure you look at your severance package as survival money only. Make a strict budget and stick to it. Cut out all excess spending. That means no eating out, vacations or anything like that until you’re working again and everything’s back on solid ground. Right now, focus on covering your Four Walls. By that, I mean food, utilities, shelter and transportation. Feed your family, keep the electricity on, pay the mortgage and put enough gas in the car to get where you need to go.

Everyone hits a rough stretch of road in life from time to time, Brandt. But you two are in a position to handle it better than most. Just remember what got you to such a good place with your finances in the first place. The discipline muscle is already there, and it’s strong. Just flex it, and it’ll help get you through this and back on your feet again!

— Dave