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Which brings me to another point. People assume that when unemployed, expenses will go down. In my experience, most did by quite a bit. In fact I think they went down by about $600 to $800/month when I was unemployed; but that was completely offset by extra insurance and medical expenses I was not paying when I was employed. My employer folded, so there was no COBRA so my insurance payments went way up and what it covered was essentially nothing as it was a High Deductible Healthcare Plan and I never met the deductible.

To add on to what Joel said:

When I was laid off in 2008, my medical insurance went from $112/mth (employed) to $730(COBRA). I think that is the correct amount; I know I remember being amazed that anyone would think I* could afford to pay a huge amount for medical insurance when I had no income and was focusing food and shelter first.


*I had some savings, received a severance and found a job quickly. The same situation applied to many people though who were not so fortunate. A better use of COBRA, IMO, would be to cover medical insurance premiums for a short time while the person looks for work.
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