Lost Your Job? Make These 6 Moves Now

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Losing a job can be stressful, but there are steps you can take to manage the process. Here’s how to minimize the damage to your career and your bank balance. 

This year has already brought a number of headline-grabbing layoffs, particularly in the tech and banking industries. Economists may disagree about the likelihood of a recession, but that doesn’t help a lot if you’ve just lost your job. Here are some key steps to take if you’re in need of a new job.

1. Make a plan

Losing a job can be traumatic and stressful. Whatever the circumstances, a plan can help make things feel manageable. Think about both the short and long term. It’s OK if you don’t have all the answers. Even if you map out what you’re not sure of and plan how you’re going to learn more, that’s a good start. My plans often start with a list of questions and a timeline for answering them.

For example, you might be able to use a side hustle or part-time work to keep money coming in while you look for something more permanent. Or perhaps you want to make your side hustle into a main source of income. Now is a good time to consider whether you want to stay in the same industry, or move to something new. If you want to switch, do you need additional training or qualifications?

2. Reach out to your network

It can be tempting to hide your job loss and get through this situation on your own. Try to resist. Not only might friends and former colleagues know about other opportunities, they can also support you along the way. I regularly get asked for recommendations from people trying to hire. If I know someone’s looking for work, it is much easier to connect them with a job opportunity.

3. Take stock of your finances

If you don’t already have a budget, now’s a good time to make one. Look at how much you spend each month against any money you have coming in. Think about alternative sources of income, such as renting out a room or selling things you no longer use. Look through your bank statements from recent months or use a budgeting app to get a realistic picture of your spending.

If you have a budget, revisit it now that you won’t have a paycheck coming in. You might need to make some cuts in nonessential spending so you know you can cover housing, food, and utilities while you look for a new position. If you have debt payments to cover and aren’t sure how to manage, you might be able to talk to your lender to see if you can temporarily suspend payments or negotiate a lower rate.

If you have an emergency fund, now’s the time to use it. If you don’t have much cash in your savings account, don’t beat yourself up. Look at what funds are available and try to be realistic about how you’re going to keep on top of your expenses, ideally without taking on debt. If you’re being offered severance pay, factor this into your calculations.

4. Apply for unemployment

Depending on your situation, you may qualify for unemployment benefits, particularly if you lost your job through no fault of your own. Contact your local unemployment office to find out how things work in your state and what you need to do to apply. Bear in mind that some unemployment offices have a backlog of applications. The sooner you can get your application into the system, the better.

5. Decide what to do with your 401(k) and health insurance

If you had health insurance through your company, something called COBRA could mean you can continue on the same plan for the coming 18 months. However, you’ll need to pay the full premium so this might not be the best option. Shop around to find out what plan might work best for you. Also, talk to your HR department and find out when your coverage will end — you might still be able to schedule appointments before it does.

If your employer offered a 401(k) and you’ve been contributing, you have a few options. You can leave it where it is, roll it into an individual retirement account (IRA), or move it to your new employer’s plan (when you have a new position.) You can also cash it out, but this can prove costly if you’re not yet at retirement age. You don’t have to decide immediately, but keep it on your radar. There’s over $1.35 trillion in forgotten retirement accounts, and that’s cash that could help you in your old age.

6. Update your resume

Take some time to make sure your resume is up to date and reflects your skills in the best possible light. If you’re considering switching careers, think about what transferable skills you have and how you can present them. You might create one master copy of your resume and tailor it to individual applications.

Your resume is not the only place potential employers will find information about you. Work on your social media presence too — especially professional sites like LinkedIn. Be aware of what information you post (or have posted) on social media. If you don’t want a potential employer to see what you share with your friends and family, make your profile private. You could create a separate professional social media presence for work relationships.

Bottom line

Losing a job can be extremely unsettling, to put it mildly. Look for ways to minimize the damage to your bank account balance and professional progress. Remind yourself that job loss is part of modern working life and don’t be afraid to ask for help in your hunt for the next position.

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