Don't assume that any future unemployment insurance payments can take the place of an emergency fund. Think of collecting unemployment as a way to strengthen the safety net you're constructing. It shouldn't be your sole support. And if you do collect unemployment, your emergency fund simply will last longer.

We recommend that you cover all conceivable expenses in your emergency fund.

Food and Shelter
How much do you spend on groceries each month? If you don't know, now is a good time to start tracking that. And if you eat out a lot, you'll either need to include that, or plan on higher grocery bills. If you have pets, include the cost of their food and care in the tab.

Unless you're ready to move into your brother-in-law's basement, be sure to cover your rent or mortgage payments, too. And don't forget utilities--gas, electric, water, phone, and even cable and Internet.

Transportation
Unless you plan on never leaving your house, set money aside for your car payments and public transportation. Of course, you'll also need money for filling up your car, for routine maintenance, and for more serious problems.

Insurance and Health
Be prepared to meet your insurance payments. That means home, auto, life, and especially health insurance.

Insurance premiums are often the first things to go when money gets tight. They shouldn't be. One of the quickest roads to penury is to let your health insurance lapse and to find yourself with a serious health condition.

Set aside money for routine dental and eye care, for prescriptions, and for any other health expenses your insurance doesn't cover. Once again, if you have pets, put their vet bills on the tab.

Taxes
Uncle Sam won't care that you're unemployed--you'll still have to pay income and property taxes. Here's some consolation, though: Your emergency fund also protects you from additional taxes. After all, your tax bill could be much stiffer if you had to sell profitable investments to cover your living expenses.

Finding a New Job
It can cost money to make money--finding a new job won't be free. Consider the cost of producing and sending out resumes. You might want to meet with a career consultant, or even take some kind of training. Take those possibilities into account.

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