You could burn through $50,000 covering an unemployment stint in today's market

• Job seekers are taking longer to find work these days, and some don't have the funds to cover the costs.
• Almost half of Americans don't have three months of emergency savings, per Fed survey data.
• Some workers are saving specifically for the possibility of a layoff.

Job searches are taking longer, and some Americans' savings aren't keeping up.

At one point, during Michele Wilke's post-layoff job search, she had less than $2,000 in her bank account — and was worried about being evicted from her studio apartment in Chicago.

To stay afloat, Wilke launched a GoFundMe that raised nearly $3,000 and borrowed money from friends, eventually accumulating more than $20,000 in personal debt. Last September, after eight months of searching, she landed a catering sales manager role.

"My goal is to make some money and pay off my debt," said Wilke, who's in her 60s. "I want a fresh start."

Wilke's experience underscores how quickly a prolonged job search can unravel someone's finances — especially for workers without much savings to fall back on. Nearly half of Americans don't have three months' worth of expenses set aside in an emergency or "rainy day" fund, according to the latest Federal Reserve survey data from 2024.

Those facing joblessness are in an ever-more precarious position; the typical unemployment stint is getting longer as US companies are hiring at one of the lowest rates since 2013. At the same time — though inflation has eased — costs for housing, food, and other essentials are squeezing household budgets.

Over the past year, I've spoken with dozens of laid-off workers. Many were surprised not just by the layoffs themselves, but by how difficult the job market they entered proved to be. Some have since felt significant financial strain, including several who had built emergency savings.

"Even with a job, it'll take a lot to climb out of my financial hole," Wilke said.

Many Americans aren't prepared financially for unemployment

As unemployment spells lengthen, the financial risks of a prolonged job search are rising for many Americans.

The median unemployment duration for US job seekers was over 11 weeks (nearly three months) as of January, up from as low as eight weeks in 2022. Some job seekers are having an even harder time: As of January, a quarter of unemployed Americans had been looking for work for 27 weeks (nearly seven months) or more, up from below 18% in 2023.

The typical jobless period in 2026 could weigh on many Americans' finances. Fifty-five percent of US adults said they had set aside money to cover at least three months of expenses in an emergency fund, according to Federal Reserve survey data. That leaves 45 percent without a dedicated three-month cushion.

Among adults who reported not having a three-month cushion, some said they could cover expenses by borrowing, selling assets, or drawing on other savings — but the majority said they would be unable to cover that amount by any method.

While layoffs remain low by historical standards, an uptick could leave many Americans struggling to cover expenses — even if severance or unemployment benefits offer temporary relief.

When Clair Todd was laid off from her site reliability engineer role at Oracle in November 2023, she was initially optimistic about her job prospects. More than two years later, she was still looking for work.

When Todd made a mid-career pivot to tech, family members who worked in the industry warned her that layoffs were fairly common. So she made an effort to build a "just-in-case" savings fund over the years.

That fund, along with her severance pay and unemployment benefits, helped her stay afloat initially. But after going through more than $50,000 in savings, she's found herself in a tougher financial position.

Todd said she's managed to cover her mortgage and student-loan payments by dipping further into savings or selling stocks. Her only source of income is between $500 and $1,000 a month reselling antiques she finds and refurbishes — including old instruments, electronics, and collectibles purchased on Facebook Marketplace and Craigslist.

"When my washer and dryer broke last year, I had to buy a new set on a payment plan — something I'd never done before," said Todd, who's in her 40s and lives in New Hampshire. "In the past, I would've just paid for it outright."

Last year, Todd decided to scale back her job hunt and began focusing on launching a website development business.

"I don't want to say I've given up, but my search has been extremely discouraging," she said.

Joanelle Cobos is earlier in her job search, but she's bracing for a prolonged period of unemployment.

When she started at Amazon as a design manager in 2021, she had just spent nine months unemployed, which had taken a toll on her finances. Determined not to be caught off guard again, she set out to build a financial buffer against another potential layoff.

"I'd started planning my life around the possibility of losing my job," said Cobos, who's in her 30s and lives in Las Vegas.

By the time she was laid off last October, her emergency fund had grown to about $25,000. Those savings, along with her severance, helped her feel well-positioned after the layoff. But if her job search stretches on, she knows that sense of security will gradually fade. She estimates she has a little under a year before her funds run dry.

"My job search feels like a ticking time bomb," she said.