(As I was thinking of what to write for today, I went through my archives and found a post I wrote but never published. It provides some advice to those who, like me, lost a job in the not too distant past, and aren’t quite sure of where to go next. Hopefully, it’ll help provide some guidance to anyone who finds him- or herself in that unfortunate situation. Good luck, and happy job finding!)
It can happen to the best of us. One day, you’re going along like normal, working steadily at a job you tolerate, if not love; the next, you’re out of a job. You are not alone; even as most economists are calling this latest recession over and are starting to talk about the recovery, unemployment is still near ten percent in the United States. (Even that figure doesn’t account for people who have given up looking for a job or who are working part-time when they want a full-time position.)
If you find yourself unemployed, whether you were downsized, fired, or had your employer go bankrupt, there are several steps you should take to get your financial life back in order:
1) Don’t Panic – Take a page from the Hitchhiker’s Guide to the Galaxy and put this phrase prominently in your mind as soon as you get the news about losing your job. At best, panicking will distract you from more productive uses of your time; at worst, it can lead you to make mistakes that will have a negative impact on your employment and finances for years to come. To paraphrase the Nike commercials, just don’t do it!
2) Learn Why You Were Let Go – The fact that you lost a job should be a learning experience. If you were fired with cause, be sure to find out why so you can avoid making the same mistake in the future. If your company was downsizing and eliminated you but not some of your coworkers, you should figure out what they did to make themselves more valuable to the company and attempt to emulate those behaviors at your next place of work. Finally, if your company went under, you can use that experience as a guide to what sort of companies to avoid in the future, or perhaps even reconsider the industry in which you’re working altogether.
3) File for Unemployment – Unless you’ve already got another job waiting, one of the first actions you should take after losing your job is to file for unemployment benefits. Each state has their own rules about how much you can receive in benefits and how long those benefits will last, making it hard to generalize about what you can expect to receive; but every dollar you receive is one less dollar you need to provide from your own pocket. Links to the individual unemployment offices can be found here for each US state and territory.
4) Take Care of Your Health Insurance – One problem with a health care system so heavily dependent on employer provided health care is that when you lose your job, you lose your health insurance coverage, as well. You should look into COBRA coverage to continue with your employer provided plan (although you’ll be picking up the entire bill now, making it significantly more expensive). You could also opt for getting health insurance on your own, which might be the less expensive option if you are young and reasonably healthy. Either way, making sure you are covered and don’t have to worry about a potential health crisis on top of your job loss should be a top priority.
5) Review Your Finances – If you don’t already have a good handle on your finances, now doing so is not a good idea, it’s a great one. Look over your assets, from your retirement investments to any property you own, so you know what resources you have available. Review all the sources of income you have, including your spouse’s job (assuming he or she isn’t in the same boat as you), your unemployment, income from rental property, and investment dividends, so you know how much you have available each month. Also go through your expenses, from mortgage/rent, utilities, and food to insurance (don’t forget your new health care costs). Then, try to cut your expenses as much as possible; at the very least, you need to be sure that your new, likely lower income will be enough to cover your basic needs for the foreseeable future.
6) Decide What to Do Next – These first five steps have been pretty universal; everyone who loses their job (or retires, for that matter) will have to handle these issues at one point or another. Where to go from here depends on what your life situation looks like; here are a few suggestions regarding how to start the next chapter of your life:
– Early Retirement: Before you get too excited, this is generally only possible for those who are near retirement age anyway or who have been very aggressive savers. Still, it’s worthwhile to take a look at your financial situation and see if you have enough in assets to sustain your lifestyle. Be very, very, VERY conservative in your estimates if you follow this route; it will be much harder to get back into the work force years from now if your money runs out than to jump back in while you are still relatively young and your skills are up to date.
–Find Another Job: The option most of us will have to take, finding another position to keep bringing in money. There’s enough advice on finding jobs to fill several blogs, let alone a single blog entry, so here’s the best thing to keep in mind: networking works. Stay in touch with friends from your last job (especially those who are still working in your industry), reach out to any organizations in your field, and ask friends, family, neighbors, and people at your local house of worship for any help or suggestions they can offer; you never know who could have a lead on a job you would love.
–Reinvent Yourself: For many people, a job loss is the opportunity to attempt something new and very different from their previous occupation. If you weren’t happy in your last job, why not try something different? There are many options, from going back to school for a new degree (either an advanced degree in your field or something from a different field entirely) to attempting to start your own business. If you’re willing to take a bit of risk, there are plenty of options available.
There; some tips to help you get through a job loss with as few problems and difficulties as possible. Hopefully, you’ll never have the need to put them into practice.