Unplanned financial hardship can be a difficult hurdle to jump. For some, a job is more than just how you make a living. It can create social ties and connections, provide structure and purpose — a job could even influence your identity. Experiencing job loss may take a toll on much more than your financial portfolio, causing feelings of loss, anger, or depression, and leading to issues with mental and emotional wellbeing.
Whether you get fired, you decide you need to quit your job unexpectedly, or your company experiences its own hardship and you lose your job as a result, it’s a hard situation to get through especially if you are not prepared for it.
This can, unfortunately, happen to anyone at any time regardless of job experience or financial standing, so it’s important to have a contingency plan in place. If not, you may push yourself into further debt at a time when you don’t have money coming in.
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Preparing a Financial Plan
If possible, the first step in handling your finances after a job loss is to start planning before it happens. Start by adding an emergency fund into your budget and contribute to it every month.
It’s a good idea to save the amount equal to two to three months of living expenses. That way, if you do experience an unplanned gap in employment, you have a few months to look for another job without having to get behind on bills, rely on credit cards, or seek out a potentially dangerous short-term loan. Now is not the time to let your credit slip, as some potential employers look into your credit history to determine your employability.
Not only should you consider how to pay your bills when you don’t have money coming in, you should also look into your benefits packages when you lose your job. What happens to your 401(k)? What should you do about health insurance? Do you qualify for unemployment benefits? Do you get paid out for your unused paid time off (PTO)?
These are all questions you can ask your HR department before you leave. If you are eligible for unemployment or you will receive a PTO check (or perhaps even a severance package), that will really help your finances while in between jobs.
Understanding the Emotional Side of Job Loss
Navigating job loss isn’t just about having money saved and making sure you’re an asset that companies want to hire, it’s also about living within your means and getting through the emotional aspect of losing your job.
Job loss is extremely stressful, especially if it’s unplanned. You’ve lost your most consistent form of income, your retirement is on hold, your bills are piling up, and you’re in employment limbo. Not knowing when you’ll find another job feels like you’ve lost control, and it’s natural to see a snowball-effect when imagining what will happen if you can’t find a job soon.
Will you lose your home? Will you have to file bankruptcy? What if another financial emergency happens when you don’t have a job? There are so many variables and everyone’s situation is different, but it’s completely natural to feel depressed when you’ve lost your job.
Remember to focus on self care in the process of finding a job. Take a few days away from the job search and resume building — just like you’d take a few days away from any job. Read a book, exercise, or cook more meals. These healthy activities will help you feel better and give you a mental reprieve from your search.
Getting Through the Loss
Getting through job loss involves a big change in your day-to-day. You’ll need to plan out and organize your day while you’re unemployed instead of allowing yourself to get too comfortable (or potentially depressed) without a job.
- Wake up at a reasonable time. Shower, have coffee, get dressed, and maintain a routine.
- Focus on your physical, emotional, and mental health. Eat well, get the sleep you need, and exercise. Do something fun when you need to be uplifted.
- Determine what financial resources are available to you and create a new budget. Plan for at least three months without your previous income, and consider what changes you should make to live more frugally.
- Call bill collectors about your current bills and see if they can work with you about payment. Explain your situation. Some companies are really lenient if you have been consistent about your payments and your credit history is in good shape.
- Make a schedule. Apply for unemployment, work on your resume, look for a job.
- Take time to improve skills or desirability. Take a typing class, volunteer, network, do a job shadow.
Job loss is hard, but make sure you’re being proactive every day. Don’t look for a job in your sweats; shower, and get ready for your day. It’s a small thing, but it helps to keep your routine in a productive place. Get your finances in order, make a plan, and look towards the future.
Network and Develop Relationships
Stay focused on the future and surround yourself with positive people. The key is moving forward and being proactive. Reach out to family and friends for emotional support. Take the time to reassess your career goals and consider your next occupational move and begin networking in that industry.
This could mean building new friendships, joining a club, or becoming involved with an organization that is relevant to your occupational goals. Many job opportunities are not advertised because people’s networks fill them. Networking may sound intimidating, especially if you are introverted, but developing your network can help you land your next opportunity for employment.
Molding Yourself into Your Biggest Asset
Your career is one of your most important financial assets, but the terms of that asset start with you. Start a new resume and list the new things you’ve learned at your most recent job, the skills you already had that you improved on, and look through your resume for any holes. Is there something you could improve on?
Fill your unemployed time searching for a job and improving your skills. Do this by volunteering, taking a class, and networking with other professionals in your field. You are your biggest financial asset and it’s up to you to transfer your skills into a career that is both fulfilling and able to keep your finances in a comfortable place. Take this time to assess yourself and your skills, both transferable and technical. Take note of your skills, where you can put them to use, and where you should be improving.
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