Unemployment Pitfalls

As time passes, you may be tempted to succumb to the following pitfalls of unemployment.  Be aware of them and exercise caution.

• Using credit to supplement income can be a real temptation.  Credit does not income.  Borrowing for expenses or payments can be dangerous.  You can dig yourself a deeper hole that will take years to climb out of.
• There is a tendency to want to protect children from the pain of doing without to shield them from your unemployment situation.  This is a mistake.  Let them get involved.  It's a family problem, requiring family cooperation and family solutions.  Teen-agers can obtain part-time jobs.  Younger members can afford to hear the word NO to their requests.  The shared experience will be an excellent way to teach children coping skills and will strengthen family ties.
• You may think this is a prefect time for home decorating or repairs you never had time for when you were working.  Think again.  Remember, only your labor is free, and costs add up quickly.  If the project is important enough, plan for the costs by raising additional funds through a garage sale.
• While your extra time off might allow for more entertaining and visiting, keep in mind these activities will cost you money.
• Don't cash in pension, IRA or 401K funds to meet expenses.  There may be a 10% federal tax penalty for early withdrawal (under age 59 1/2).  The total amount also is taxable in the year in which it is withdrawn.  Using the funds now will take a substantial bite out of your future security.