While losing a job is distressing, the best thing you can do is take action. Get yourself moving in the right direction so you can get back on your feet quickly. Here’s what you need to know if you find yourself without a job.
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Read All the Fine Print Before Signing Anything
The first time I was laid off, it was my first full-time job out of college. This was during the Great Recession and I knew nothing about layoffs and unemployment. Feeling blindsided by the layoff, I signed everything the human resources representative put in front of me.
Looking back, I should have waited and reviewed all the documents I was signing. While it can be difficult to process everything at the time of getting your notice, ask to take the severance documents home to review.
Talk to the HR representative about your options and carefully consider if you agree with the terms of the severance, any non-competes, and non-disclosure agreements. Know your rights and be ready to negotiate if you think any of the documents offer unfair terms.
File For Unemployment
If you were let go due to no fault of your own, you may be eligible for unemployment benefits. Every state has its own rules and regulations about how and when you should file. Read up on them and file as soon as you’re allowed to fill out the paperwork.
How much money you receive in your unemployment check depends on your state of residence and your previous salary. The coronavirus stimulus bill also changed some rules and requirements for qualifying.
With the new provisions, you will get an extra $600 per week through July 31, 2020, on top of the benefits from your state. The stimulus bill also extended eligibility from 26 weeks in most states to 39 weeks.
When filing for benefits, keep in mind that unemployment offices are overwhelmed so it may take some time for your application to get through. Read up on the rules to see when you can file and apply as soon as possible.
Look at Health Coverage Options
If your job provided health coverage for you and your family, you will need to look into other health coverage options. While it may be tempting to forego coverage to save money, it could end up costing you more in the end in medical bills.
Your company should provide your information on getting COBRA options, which allows you to keep your current coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers to keep the same health coverage for up to 18 months but they will probably have to pay the full premium.
If you are married, you may be able to join your spouse’s health plan, which should be cheaper than COBRA coverage. Another option is to purchase a plan through the healthcare exchange. Losing coverage because of a job loss is a qualifying event, which entitles you to buy coverage through healthcare.gov. You may qualify for subsidies, which could make this a more affordable option.
Having medical coverage is especially important during the coronavirus pandemic as you don’t know if you will end up getting sick and having to be hospitalized. Bills can add up quickly, piling on thousands of dollars to your financial burden.
Review Your Budget and Cut Spending
Losing your income means less money coming in the door. This is the time to review your budget and figure out where you can trim the fat. While unemployment checks can provide some relief, you don’t know how long you will be without a job.
It’s a bad idea to keep your spending at the same level as it was while you were employed. Review your spending and identify a few areas you can cut back. Consider cutting the cord on cable, eliminating dining out, and taking a hard look at your grocery bill.
Go through your monthly bills and identify any subscriptions you can go without, such as a gym membership or a box delivery service. Identify areas where you can cut your spending such as your grocery bill. Reducing your spending now ensures you don’t face more financial strain down the road.
If you don’t have a budget, now is a great time to create one using your current income from unemployment and from everyone else in your household. Don’t include the extra $600 weekly supplement as that will expire at the end of July.
When creating your budget, make sure your current income can cover your monthly bills, including unemployment, spouse’s paycheck, and any additional income sources. You can stash the extra $600 in savings to help you cover any emergencies.
Many people don’t realize that unemployment benefits are taxed. You can opt to have your taxes withheld from the checks you receive now or pay them when you file your tax return. Whatever you decide, don’t forget to factor this in during tax time.
If you don’t update your resume regularly, now is the time to get it in tip-top shape. Dust it off and update it with your most recent job and skills. Take the time to review your entire resume and tweak it so it appeals to recruiters.
If you have a LinkedIn profile, make sure it’s up-to-date with your most recent experience, successes, skills, and certifications. Reach out to former managers and ask them if they would be willing to write you a recommendation on LinkedIn.
Don’t have a LinkedIn profile? Start one and include all relevant experience, any certificates, and other relevant information that will make you an attractive candidate. Many recruiters use LinkedIn to research potential candidates.
Reach Out to Your Network
While it’s always good to keep in touch with former managers and colleagues, now is the time to step up your networking game. Reach out to people you used to work with to ask them to connect and catch up.
Let them know you’re in the market for another challenging role if they come across anything that fits your skills. Networking can be a powerful way to find a job that is a suitable fit for your skills. Most of the jobs I have gotten over the years have been through networking.
If you’re interested in a company or an industry, find out if you have a mutual connection through someone in your network. Ask them to connect you so you can learn more about the company to see if your skills would be a good fit.
The more you can learn about a company and its culture, the better prepared you will be if you land a job interview. When connecting with someone new, be gracious and thank them for their time. They may not be able to offer you a job, but the insights they provide can help you stand out among other candidates.
Apply For Jobs
When it comes to landing a new job, there are many factors that can make the difference between getting an interview and not getting a response. Part of being successful is a numbers game so apply to as many positions as you can find that fit your skills.
Keep track of the positions you apply for and follow up with the ones that are a perfect fit. Find out if you have any connections inside those companies to gain insight into the process. The more proactive you are, the more likely you will succeed in landing an interview.
Look up career coaching groups around you, and join one that seems like a suitable fit. When I was unemployed, I joined a local group at the recommendation of a friend who was a member. It allowed me to connect with an alumnus of the group which was employed at an agency. Through this connection, I landed a job at the agency just a month later.
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Don’t Forget About Your Retirement Accounts
Retirement accounts tend to get lost in the shuffle as you figure out your severance pay, file for unemployment, and start looking for a job. However, because of varying rules between companies, you may have to deal with your 401(k) sooner rather than later.
Find out what are your company’s rules when it comes to retirement accounts for former employees. Some will cash them out and send you a check if the balance is under a certain amount. Contact the HR department to determine your options so you can decide on the next steps.
Consider rolling over your 401(k) account into an individual retirement account (IRA) at a company such as Vanguard or Fidelity. They offer low-fee funds that will help you grow your balance while minimizing your costs.
Earn Extra Cash
Making some extra money can help you stretch your unemployment benefits and cover expenses that don’t fit your budget. Check with the rules of your state’s unemployment office about how it treats any income you earn while receiving benefits.
Some states will reduce your unemployment benefits by a certain amount if you earn money during a claim period. The rules may differ when it comes to the additional $600 weekly federal unemployment supplement.
Depending on your skills, there are many side hustles you can try to earn extra money. Check out our list of ways to make extra money to get you started.
Have you been unemployed before? What steps did you take to set yourself up for financial and career success? Share in the comments.