Keep Funemployment From Draining Your Bank Account

Social media has popularized the term " funemployment" (a period of unemployment when you're traveling, relaxing or pursuing new hobbies instead of actively searching for the next job), and it's even in the Merriam-Webster Dictionary. During the dog days of summer, it's tempting to hit the beach rather than fire off cover letters to hiring managers who may be out of the office themselves.

But how can you balance the desire for funemployment with the need for financial responsibility? U.S. News talked to several financial experts and compiled their tips.

Plan for uncertainty. This popular advice bears repeating: While you're still gainfully employed, sock away extra cash just in case, says Michael Wall, president and founder of Retire Well LLC, an investment advisory firm with locations in Palm Beach Gardens, Florida, and Altoona, Pennsylvania. Having an extra financial cushion gives you greater flexibility when you lose a job or decide to leave voluntarily.

Create a budget. If you've saved diligently, Wall says you may feel comfortable allocating some of your savings to a trip or other fun experiences while you're unemployed. But create a budget and timeline first; don't just give yourself a blank check to spend. "People get themselves into trouble when they don't start that time with a budget," Wall says. "Consequently, what happens is that time ends up being longer, and they spend more than they anticipated. It's a downward spiral before they get into the next job."

Set a timeline. Be reasonable about how much time off you can give yourself before you start actively job hunting again. This might depend on your assets, tolerance for risk, what support systems you have in place and the employment outlook in your field. Unless you've put aside a lot of money or have another source of support like a working spouse, "taking a year off might be unrealistic," Wall says. "I think a month or two weeks is very realistic."

Put your bills on autopay. Before you go camping or leave for a backpacking trip, figure out how you'll pay bills while you're gone so that missed payments don't wreck your credit. Manisha Thakor, director of wealth strategies for women at investment company Buckingham and The BAM Alliance, suggests putting any student loans and other bills on autopay if they're not already. "Be really rigorous about understanding what debt you have outstanding and what game plan you have to make sure you are not missing a single payment," she says.

Avoid debt. Wall and Thakor stress the importance of not incurring debt during a period of intentional or unintentional joblessness. "By all means do it, but be really creative by giving yourself the boundary that you cannot incur debt," Thakor says. "What I've observed with people is that by forcing themselves to live within that constraint, the creativity that comes out is unbelievable." You might travel more affordably by housesitting, crashing on friends' couches or camping instead of staying in pricier hotels.

Focus on joy-based spending. You may need to reduce your spending to avoid debt, so Thakor suggests embracing what she calls "joy-based spending." That is, "thinking about every time you spend money whether you're truly maximizing joy." Maybe you can still justify the $4 latte because of the joy it brings when you spend the afternoon at a coffee shop with friends, but you'll cut cable TV or downgrade your gym membership. "I've found that people are able to reduce spending but increase their joy because they're eliminating stuff that's not making them happy," she says.

Get a short-term job. Funemployment doesn't preclude you from taking a less demanding part-time job. "What I encourage people to do is put themselves back into their college or grad school mindset where you take any job," Thakor says. "Not work that's draining to you, the kinds of things that add a little crazy flair of fun that you wouldn't make a career out of." In her 20s, Michele Botwin, who's now 44 and a Los Angeles-based entertainment journalist, left a journalism job that required lots of travel and worked as an extra on TV shows and movies in Hollywood for nine months before returning to journalism. "Not only was I earning money, but I was having a blast getting to know people and observing the filming process. It's a window into another world," says Botwin, who found steady demand for her casting "type" of over age 18 to play younger roles and earned overtime when shooting ran long. "I had the time and flexibility with no other responsibilities in my life, so I was making enough money and some extra."

Use the time for reflection. Periods of unemployment aren't just for fun and travel -- they're also a good time to regroup and refocus on what you want to do next. Botwin says having lots of downtime as a movie extra might be good for someone who wants to squeeze in creative work or think about his or her next steps. "It's not just going out and having a good time," Wall says, "It's stepping back and trying to re-evaluate what do you want to do with your life, finding a career that offers the balance that you're looking for."

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