Lost your job? You’re not alone. Millions of Americans are filing for unemployment.
Losing your job can be disorienting as you suddenly find yourself without a source of income. As someone who has been laid off three times, I can relate to feeling lost, upset, and helpless as you try to figure out your next steps.
First, allow yourself to grieve for your job and the security it provided. Even if you didn’t like your job, losing it can be a big hit to the ego. It took some time for me to get over my resentment of being let go when others got to stay. Layoffs are about the company’s need to redirect resources rather than a personal attack or a judgment of your job performance.
Next, channel your frustration toward putting yourself in a better financial position. Your first step after you sort out your severance and sign on the dotted line is to apply for unemployment.
Here’s what you can expect when filing for unemployment benefits.
Deal of the Day: Chase is now offering a $200 cash bonus when opening a Total Checking Account. No minimum deposit and all deposits are FDIC insured up to the $250,000 per depositor maximum.
Table of Contents:
Check If You Qualify
Unemployment programs are joint ventures between federal and local governments. Not everyone qualifies for unemployment benefits. While requirements may vary from state to state, overall you will need to meet the following criteria:
- Lost your job through no fault of your own – To qualify for unemployment benefits, you need to have been let go from a company because of a lack of available work. If you were fired for cause, you typically cannot receive benefits.
- Be an employee – Only company employees qualify under unemployment guidelines. If you’re a contractor, you usually cannot file a claim. The coronavirus legislation expanded coverage to include people who did not traditionally receive unemployment, such as freelancers and independent contractors, so it’s always recommended to check with your state’s unemployment office.
- Meet wage requirements – Most states have a base period used to qualify an individual for benefits. On average, you must have worked four out of the last five calendar quarters to file for unemployment.
Check with your state’s program for any additional requirements. If you only worked part-time, it’s worth checking if your state offers coverage.
Gather Your Paperwork
Before you can file for benefits, you will need to get all your paperwork together. Here’s what you will need to submit your claim:
- Personal basic information such as your name, address, phone number and Social Security number
- The names and addresses of your last few employers, including the dates you worked there
- Earnings information for your last few employers, including paycheck stubs, W-2 forms and any additional documents you have showing accurate earnings
Contact Your State’s Unemployment Insurance Program
Every state has different rules for when you can file for unemployment benefits. Some states have a waiting period of a few days to a few weeks before you’re eligible to fill out your claim. The coronavirus legislation has changed the waiting period requirement, but it’s always best to double-check.
Contact your state’s unemployment insurance program or check the website for more details on who qualifies. If you work in a different state than where you live, you should file for benefits in your state of employment.
For those who worked in more than one state over the last calendar year, it’s best to contact your current state of residence for guidance on how to file your claim. Once you have the details sorted out, it’s time for the next step.
File Your Claim
One of the quickest ways to file for benefits is by filling out an online application through the state’s unemployment website. Because of the increase in demand in recent weeks, many states have experienced delays and other problems when trying to file online.
Check your state’s website for recommendations on the best times to file. Some states recommend applicants access the website during off-peak hours such as early mornings and late evenings.
File a claim as soon as you’re eligible. With many states waiving waiting periods, this often means you can file as soon as you are no longer employed. The sooner you get approved for unemployment, the sooner you can get paid.
In addition to the online option, some states offer unemployment applications via phone or in person. However, because of the current recommendations for social distancing and overwhelmed unemployment offices, filling out an online application is probably your best option.
Figure Out How Much You Can Expect in Benefits
It’s important to realize that unemployment benefits are not designed to replace your income. They are a bridge to help you pay essential bills and expenses until you find another job.
How much you receive depends on your state of residence and the formula they use to calculate the amount. Your benefit check is meant to replace roughly 40% to 50% of your income, depending on your previous salary.
When you’re used to getting a certain paycheck every week or two, unemployment benefits can fall short of covering your living expenses. This was my experience when I got my first check and realized it was only a fraction of my former salary.
This leads me to my next point, which has to do with your budget.
Rework Your Budget
Losing your job can be a big financial shock. To minimize the damage to your finances, you need to address your budget as soon as possible and rework it to reflect your new money reality. Try to minimize dipping into your savings and instead rely on cuts to carry you through.
Review your current spending and cut ruthlessly. Eliminate any unnecessary spending such as dining out spending, drinks out, gym membership, and so on. Create a bare-bones budget, which is the minimum you can spend without making any major changes such as selling your car or switching up your living situation.
Keep in mind that any unemployment benefits you receive through July 2020 will have an extra $600 weekly check from the federal government. Don’t count this income into your budget projections as it’s set to expire at the end of July.
Consider the possibility you may be unemployed for longer than a few weeks, depending on the state of the economy. Figure out what big changes to your spending you will make to mitigate long-term damage to your finances. This may include moving in with a roommate, moving to a smaller house or apartment, or trading your vehicle for an older model.
Fulfill Any Requirements
Some states require applications to search for work every week and show proof before they can receive benefits. While some requirements may be waived because of the pandemic, other states still have work search requirements in place.
Check with your state’s unemployment office to ensure you meet all requirements to not only qualify for benefits but also continue to get checks. Even if it doesn’t seem likely you will find a position, it’s still good to keep your eyes open for any available positions that will fit your skills and experience.
Don’t Forget About Income Tax
Many people don’t realize that unemployment benefits are taxed. While it may seem painful to have taxes withheld from what is already a small paycheck, you will owe the money at some point.
Most states allow you to decide to either have taxes withheld from each benefit check or to get your full benefits. If you opt to get full benefits, just keep in mind that you will owe taxes on any unemployment checks come tax time.
Getting let go from a job can leave you angry and disoriented. While it’s okay to give yourself a period to grieve the loss, the best thing you can do is to figure out your financial situation. Contact your state’s unemployment office and file for benefits as soon as you are eligible.
Rework your budget to reflect your new money reality and avoid touching your emergency fund or other savings. While your finances may be tight for a while, there is a light at the end of the tunnel.
Have you filed for unemployment? What was your experience in getting benefits? Share in the comments.
Also Read: 9 Steps You Should Take If You Lose Your Job