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Actions 7 Steps to Take When You Lose Your Job
Key Takeaways
- Always review what's in writing with professionals before doing anything else.
- Your budget, insurance and investments may need adjustment until you find a new job.
- Consider reworking your skills, education, brand and connections before applying for a new job.
Losing your job is never a pleasant experience. But if it happens, knowing what to do right away can alleviate some of your stress, improving the odds you'll make sound financial decisions and stay solvent until you're on a new payroll. These are the key steps you need to take when your employment ends.
1. Review your contract/HR forms with both HR personnel and an attorney (if possible)
Reviewing any formal work documents you may have ensures you understand why you were let go, whether the termination was legal and what obligations both you and your former employer have. You might find you are entitled to additional benefits, or your attorney could explain and get the ball rolling on legal options.
2. Contact your creditors and adjust automatic payments
While some creditors are extremely strict, many have hardship policies Opens in new window that allow you to reduce payments or put them on hold for as much as a year. Interest often continues to accrue as agreed, but these types of arrangements can prevent late payment fees. Make sure you understand whether you're required to close the account to participate, and ask what the creditor will report to the credit bureaus. If account closure is required, you may want to ask the creditor to note it as "closed by consumer." Additionally, because you might have to pause some services, decide which accounts can continue automatic payments.
3. File for unemployment
Typically, you are eligible for unemployment Opens in new window as long as you left involuntarily and weren't let go for cause (i.e., doing something illegal or explicitly against company policy). Contact the unemployment insurance program Opens in new window for your state to get started.
4. Adjust your health insurance
You might be able to get health insurance coverage until your next job begins through COBRA, Medicaid or CHIP Opens in new window. These can be less expensive than paying out of pocket. Another option if you’re part of a couple: see if you’re able to switch to your domestic partner/spouse's insurance plan.
5. Tweak your budget and investments
With less money coming in, you might not be able to enjoy the same type of lifestyle you're used to or set aside as much in your portfolio. Rework your budget and your investments based on your new income.
6. Prepare for your job search
Now might be the time to take some classes, volunteer or serve on boards to keep your skills fresh or, if desired, shift gears with your career entirely. Contact fresh references, reach out to the professionals in your circle of friends and colleagues to let them know you're job hunting, clean up your social media profiles and get your resume up to date. Be clear about your plans and objectives through this process.
7. Look for work
In addition to looking at traditional online and offline job postings, talk to people in your network and follow job hiring activity through companies' social media pages. It can be helpful to work a side gig or part time job until you find something permanent. In many states this does not affect unemployment eligibility Opens in new window, although it might reduce the payment for which you are eligible. Check with your state’s unemployment office for detailed information about how your benefits could be impacted.
What you can do next
Don't forget to take care of yourself. Do things you enjoy and maintain your relationships, in between updating your resume and taking care of the paperwork from your last job. The better you feel about yourself and the more support you have, the more likely it is you'll keep the negative aspects of unemployment (e.g., depression) at bay.
Footnotes
Wanda Thibodeaux is a freelance writer and sole proprietor of Takingdictation.com. Her work has appeared in online and print publications such as The Finance Base, Legal Beagle, Bankaroo and Inc.com.
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