If you’re one of the casualties and have lost your job due to COVID-19, you’re not alone (clearly). You probably feel stressed about the situation and you may feel unsure of what to do next.
As someone who has been “let go” in the past, I can tell you that it stings right now, but things will get better. Believe it or not, this might be the very opportunity you need to do what you’ve always wanted to do–whether that’s start your own business or completely change careers. The point is, things will eventually turn around and right now, you’re in control of what happens next.
At risk of going into full-inspiration mode on you, I want to share some actionable steps you need to take right away. So in this article, I’ll give you a list of things you really should be doing within the next 24 hours.
Yes, I know emotions are rampant right now. But if you can take a moment to step back and think strategically, you’ll be able to step away for a few days and clear your head to determine your long-term plan. And that’s precisely what I am going to help you do.
Table of Contents:
How Bad Has It Gotten?
Before I dive in, I want to really emphasize the scope and scale of this pandemic. According to the Bureau of Labor Statistics, the national unemployment rate rose by 10.3 percentage points over the month of April 2020 to 14.7 percent and was 11.1 points higher than in April 2019.
I personally know a handful of people that have been laid off and can’t even get a response from the unemployment office because they’re so overloaded. Also, many of you may have not known this (I didn’t at first), but gig workers and self-employed individuals couldn’t even apply for unemployment until the end of March when the first stimulus package was signed into law. So people have been hurting, for sure.
Some experts have predicted unemployment to reach up to 25%, while others have suggested the trend will move downward over the course of the next six months. Regardless, we still don’t know what the future holds, so the best thing you can do now is prepare for the worst. Now, let’s dive into the actionable things you need to do RIGHT NOW if you’ve been laid off due to COVID-19.
File for Unemployment
The absolute first thing you need to do is file for unemployment, especially because getting a response can take time.
Your state might pay out unemployment benefits if you have an employer that’s been closed temporarily due to coronavirus, have been quarantined but you’re planning to go back to work, or have temporarily left work because of the risk of becoming infected, or if you have to care for another family member.
In addition, the CARES Act was signed into law late in March, providing additional unemployment benefits. For example, if you’re a gig worker, independent contractor, freelancer, part-time employee, you’re eligible for $600 a week in federal unemployment insurance benefits (in addition to any state benefits you’d receive) through the end of July.
It also extends unemployment from the state for 13 more weeks and provides incentives to states who find ways to eliminate waiting periods. Finally, CARES got rid of some of the requirements around your work history that were previously in place that may have actually disqualified you in the past for unemployment.
Bear in mind, though, that unemployment guidelines will likely be slightly different in each state. Ensure that you’re filing unemployment from the state you worked–which may not always be the same state you live in.
And if you are living in another state than where you worked, I would suggest contacting the unemployment insurance agency from the state you live in for guidance. If you’re unsure of how to get in touch with your state’s unemployment office, check out CareerOneStop by the Department of Labor.
To file online, you need to have your Social Security Number, address, phone number, email, bank information, recent employer’s information, your employment dates with that employer, your reason for leaving, and any pension or severance package information.
In most cases, you’ll get your first deposit within three weeks, but as I shared above, know that it could be significantly delayed due to the sheer volume of requests coming in right now.
Get Your Health Insurance Sorted Out
If you’ve been furloughed instead of terminated, there may be a chance your company is allowing you to keep your health insurance. That said, you’ll still need to make a contribution toward your health insurance.
Remember that you pay for this out of your paycheck (which you won’t be receiving if you’re furloughed), so you’ll want to see how that’s handled with your employer. My recommendation is to not let this lapse and find any way you can to pay for it since health insurance is so critical.
If you’re completely laid off, that’s a different story. In some cases, your employer will extend your health insurance through (or even after) your severance package–but that’s not common. In most cases, your insurance ends with your employment or the month after.
Your first, and probably most expensive, option is to go with COBRA, which is a federal program. COBRA allows you to keep the plan you had with your employer for up to three years after you’ve been laid off. But don’t get too excited–COBRA can get insanely expensive, as you have to pay all the premiums on your own.
Usually, though, your best bet will be to buy health insurance through Obamacare (the Affordable Care Act) or through private insurance–both of which I’ll discuss briefly here. One of the benefits of Obamacare is the credit you get for health insurance when you’ve lost your job and purchase insurance through Healthcare.gov or your state’s health insurance marketplace. Both of these tend to be more affordable than private insurance, but may not offer the coverage you want or need.
The other option is to buy private health insurance. eHealthInsurance is the one I most commonly recommend since it’s so easy to use and you can get a free quote online within a matter of minutes. Getting private health insurance might be a good option if you have specific health insurance needs, children, or other factors that won’t be covered sufficiently by a government-offered plan.
We also recommend shopping for health insurance online via Policygenius. You may be able to find a cheaper option than what you’re currently paying for. Plus, Policygenius is free to use!
Take Care of Yourself
Now that you have filed for unemployment, it’s time to take a step back and try to relax. What you’ve just been through (and trust me, I’m speaking from experience) can be shocking, traumatic, heartbreaking, and loads of other emotions. So you’ll be doing yourself a favor by staying calm and collecting your thoughts.
According to Stanford University, some of the emotional reactions you may experience include a loss of enjoyment or appreciation, and feelings of worthlessness or shame. But there are physical reactions, too. Stanford also says we may experience physical symptoms such as weight loss/gain, headaches, or sleep disturbance after we’re laid off.
This is pretty serious stuff. Know that I’m not a doctor or a psychologist–just someone who’s experienced some of this stuff as well as seen it happen in others. And I know we’re getting pretty deep here, but I think it’s important to give yourself a few days and recognize that these emotions and symptoms are totally normal considering the circumstances.
You don’t have to rush into fixing everything right away. When I was laid off from my first banking job (along with 1,000 others), I felt the need to “fix it” right away and go find another job. I did land one, but I probably would have been better off taking a step back and waiting until the (emotional) dust had settled.
Fold in the fact we’re in the middle of a global pandemic, you’ve probably been quarantined (or at least partially quarantined) for a while, and the world around us has completely changed in a few short months, and it just adds to the complexity of the situation.
Take the layoff as an opportunity to start a new hobby or pick up a new exercise routine. You can always look for jobs but you don’t need to do that 24 hours a day. Focus on yourself as much as your career and you’ll be putting yourself in a better position to succeed in the long-run.
Get in Touch With Your Lenders
Reach out to every company you have some type of bill with. This might include your mortgage, car payment, or even a utility like water or gas. Explain your situation (briefly) and see if they are willing to reduce fees, waive fees, pause payments, or any other type of support while you look for work.
But you’ll want to be ahead of the game — not behind. Meaning, call them right away (as soon as you’ve collected your thoughts) and let them know what’s going on. A lot of banks right now are willing to defer your monthly payments for things like your mortgage, car loan, credit card payment, and more. Make sure to SPECIFICALLY state that you’ve been negatively impacted by COVID-19.
As a specific example, if you’ve been financially impacted by the coronavirus, both Fannie Mae and Freddie Mac will allow you to reduce or suspend your mortgage payments for up to a year–assuming your mortgage is backed by them. This actually equates to about 50% of the mortgages in the country. There are a few other banks following suit, allowing you to suspend payments for up to three months.
And you may have noticed that your federal student loan payments have been paused. That’s because of the CARES Act, which is having federal student loan payments suspended until the end of September.
You don’t get charged interest and you don’t need to do anything to stop or restart your payments–your lender should handle it. Note that this won’t apply to private student loans, so if you have those you’ll need to contact them separately to see if they can help you out.
Get Your Current Expenses Corralled
Now that you’ve started to take care of your immediate obligations, it’s time to look at getting your current, everyday expenses taken care of. The first thing you have to do is create a budget–a really strict one–and STICK to it.
I’m a believer that budgeting is a lot like dieting–it’s easy to fall off the wagon if you’re not committed and set yourself up for something realistic. I also see a lot of people, myself included, fail with their budgets when they’re too complex and require too much work to manage.
For example, You Need a Budget is one of my favorite budgeting tools but it requires a ton of work and attention to make sure your budget is in check. This is intentional, too. Their creator, Jesse Mecham, says that you need to be very intentional with money and know about every dollar going in and out. It works, but it requires a lot of time.
Another method, if that doesn’t work for you, is something like Albert. I personally have been using Albert for about six months now and I love it. It basically does everything for you–budgeting, auto-saving, etc. And it puts all of your accounts in one single spot so you can see all of your assets and liabilities quickly.
However you do it, even if it’s on a piece of paper, just make a strict budget and stick to it. Cut out anything that’s not absolutely necessary. Now is a time to really carve down what you’re spending so you can focus on keeping your finances afloat while you’re out of work.
Consider Short-Term Work
Out of the gates, chances are you’re not going to get a job just like the one you just left. If your company is laying off, its likely other, similar companies in the area are as well. That said, there are plenty of businesses that are looking for workers for areas that are considered essential. Places like grocery stores and delivery drivers are in high demand right now.
To get more specific, some of the more notable companies actively hiring right now include Kroger, Philips, Facebook, Wells Fargo, and UnitedHealth Group. A good way to see who is hiring in your area, though, is to do a quick Google search for “who is hiring in [your closest major city] during coronavirus”
Or, if you’re not ready to go work for another company yet, you can pick up gigs with places like Uber and UberEats, DoorDash, Instacart, and other gig delivery/driver services.
But Make Sure You’re Thinking About Your Long Term Plan
Regardless of whether you take a short-term position or do gig work, you should be thinking about your long-term plan. Believe it or not, now is an excellent time to consider your future. If you hated your job before, do you really want to go back into that line of work because it “feels” most natural? Or are you better off thinking about a career change and doing something you have always wanted to?
I know it’s hard to digest right now, but I like to think about these situations as an opportunity to change course. People change career paths multiple times in their life, so this might be a chance for you to do the same.
Also, COVID-19 will begin to create opportunities in new areas, such as information technology, virtual operations, sanitation, delivery services, and in-home services. One would also assume there will be an increased demand for healthcare workers and possibly government-related jobs. If you keep an eye on our weekly market reports, you’ll have insight into what’s happening around the world and you can use that as a starting point for looking for a new job.
Look — I get it. Getting laid off is a terrible experience. However, it doesn’t have to crush your short- and long-term prospects for a job or even a complete career transformation. It just really depends on how you react to the situation. Take the time to cover your bases and make sure you’re in a sound mental state, but after a few days, start looking at this as an exciting opportunity to potentially reinvent yourself.