Even though the economy is on the mend and the national unemployment rate is hovering around 5%, millions of Americans are still looking for work.
In fact, you may have recently received a pink slip – and now find yourself reeling, emotionally and financially, from this bad news.
Don’t give in to despair. Just resolve to keep your mind, and your budget, from getting off kilter while you’re among the ranks of the unemployed.
Here are 3 money moves to make now if you’ve been hit with sudden job loss.
Adjust your lifestyle expenses
Anytime you go through an unexpected layoff, the prudent thing to do is immediately curb your discretionary costs and cut back on various lifestyle expenses.
It’s so easy to think: “I’ll land another job soon,” and to keep on spending the way you had been, when you were previously employed. You might be especially unwilling to cut costs if you are in a relationship, and your partner is still bringing in a paycheck.
But even if you have the luxury of a second income in your household, it’s wise to be fiscally conservative for the time being.
So take a hard look at your outgoing expenses and shave several “wants” out of your budget – like eating out, routine trips to the hair or nail salon, clothes or gadget shopping, along with frequent socializing and entertainment-oriented activities.
You don’t have to go into full-scale lock-down and NEVER enjoy yourself.
But you’ll be thankful later on if you keep some extra cash in the bank, instead of spending all your money, or even continuing to use your credit cards, as if your fortunes and job situation haven’t changed.
File for Unemployment Benefits
Many people choose – for one reason or another – to skip filing for unemployment benefits. Some people (mistakenly) think that they’re getting a government handout. Well, not really.
After all, you’ve been paying into the unemployment system, little by little, in the form of unemployment insurance that was taken out of your paycheck.
Other people reason that unemployment benefits should be for the truly needy. Well, I have news for you: no matter what your title, income or position was, you ARE currently among the needy – as in, you need a check to help replace some of your lost income!
Additionally, some individuals are just too proud, or would feel ashamed if anybody saw them at the unemployment office.
Hello! Another news flash! You don’t have to necessarily show up on the unemployment line anymore. Many places let you file an unemployment claim electronically online.
Besides, why should you be embarrassed to see someone – either a stranger or someone you know – in the unemployment office? If that person is there, they’re in the same boat as you: jobless!
Do yourself a favor: file for unemployment benefits right after job loss because that extra cash will be a financial lifeline, and you really don’t know how long it’ll be before you get another paycheck.
Lock in any health or career-related benefits you can
If your employer has offered you a severance package with extended benefits, take advantage of every perk that you can. Sometimes you’ll be able to negotiate – or even re-negotiate – for COBRA or healthcare benefits to last for many months.
Other times, an ex-employer may provide you with resume preparation services, access to a head-hunter or outplacement firms, or even the ability to use the company’s offices and resources for a set amount of time.
Although a separation from your previous employer can come as a shock, and may have you mad, frustrated, or feeling depressed, try to push past those negative emotions and focus on the practical side of what’s being offered.
Don’t let hurt feelings, anger or pride keep you from tapping into health or career-related benefits that can help you in the long run.
Again, going through a sudden job loss can be jarring – especially emotionally – which is why it’s important to think with your head, not your heart.
It also helps to surround yourself with supportive people, to continue to network, and to know that you’ll be back in the workplace one day. Hopefully, you’ll snag an even better job too.
Even if it feels hopeless today, take heart in knowing that all is not lost.
Having gone through a downsizing myself – a job loss, in fact, that ultimately led to me becoming a very successful entrepreneur – trust me when I say: it really does get better.