Unexpected Job Loss: 10 steps to take now
Job losses can happen even to the best of workers in any economic environment. And while a job loss is never easy, there are things you can do to minimize the impact on your life and career.
Here are 10 steps to take:
1. Find out about your unemployment benefits. If you were a full-time employee, you may be entitled to unemployment insurance benefits that could help you pay your bills while you search for a new job. To find out about your benefits, contact your state employment or job development office.
2. Find out about your health insurance options. If you participated in your employer's group health insurance plan, you might be able to continue that benefit after you lose your job through a federal law known as COBRA. If you're entitled to choose COBRA coverage, your employer must give you at least 60 days to decide whether you want it. You may find cheaper options at HealthCare.gov or on your state's health insurance exchange.
3. Identify sources of income. Look for a part-time or gig work to supplement your unemployment benefit and severance pay, if you received any. If you think you might need to borrow from family or friends, let them know your situation now so they can be prepared to help you in the coming months.
4. Rethink your budget. Review your expenses to figure out the minimum amount of cash you need each month. Don't wait to cut discretionary purchases. The longer you can stretch your cash, the more time you'll have to secure a new job with less financial pressure.
5. Postpone debt payments. If you have bills you won't be able to pay until you're re-employed, call the companies, let them know your situation, and request a temporary hardship accommodation. An honest discussion upfront should be better for your credit scores than missing payments.
6. Try not to disrupt your retirement plans. It may be tempting to withdraw funds from your 401(k) or Individual Retirement Account (IRA), but if you do, you'll likely have to pay income tax and an early withdrawal penalty. If you borrow against your retirement account, you'll avoid cashing out, but you'll miss out on any investment gains until you repay your loan.
7. Start your job search. After you take a couple of days to decompress, update your resume and post your work profile on as many reputable networking and job search websites as you can. Tell everyone you know that you're looking for a job and ask them to let you know about opportunities that may fit your skills and experience. Be open-minded about a career change, if that's a good option for you.
8. Brush up your job interviewing skills. Ask your family and friends to role-play job interviews with you to boost your confidence and help you make a good impression with potential employers. Be prepared for telephone or videoconference interviews as well as in-person interviews.
9. Ask for help. If you're feeling anxious about your job search, remember you're not alone. A March 2020 survey by J.P. Power found 37% of U.S. adults were concerned about their jobs. Share your feelings with people close to you, ask for what you need and let them help you on your quest to find a new job that you'll love.
10. Try not to panic. It is scary to suddenly lose your job, but job markets have ups and downs and can be impacted by major events like COVID-19 or inflation. A downturn may last weeks or months, but it won't last forever.