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Losing your job can be devastating, and the fallout—financially, professionally and emotionally—can take a serious toll. Though you may feel defeated in the moment, you're not alone, and there are many things you can do to get your career back on track.
If you're facing abrupt unemployment, taking steps to secure your finances is important to avoid disrupting your life and living situation in the immediate future. Once you have some breathing room, set your attention on finding a new job and restoring any lost income.
Read on to learn more about what you should do if you just lost your job.
File for Unemployment
If you're unemployed due to no fault of your own—meaning you weren't fired and you didn't quit—you may be eligible for unemployment benefits. Unemployment benefit programs pay out-of-work people a portion of their previous salary as they look for a new job.
Unemployment benefits can be collected for up to 26 weeks in most states, and eligibility is typically determined on a bi-weekly basis. To remain eligible, you'll need to explain your job search and whether you've accepted income from elsewhere. You're still able to take on side gigs or start a part-time job while on unemployment, but you may have your benefits reduced or completely cut off depending on how much you earn.
In response to the spike in unemployment as a result of the COVID-19 pandemic, benefits and eligibility have been expanded, which means you may now qualify for unemployment even if you couldn't previously. You can read more about recent changes to unemployment here.
Check Your Health Insurance
If, like many workers, you received your health insurance through your employer, losing your job could also mean losing your health insurance. Depending on your insurance plan, your benefits could run out at the end of the month or sooner, so it's important you find an alternative as soon as possible.
Workers who've lost their insurance due to unemployment may have special options when it comes to enrolling in a new plan. First, losing your job qualifies you for a special enrollment period, during which you can buy a new insurance plan from the HealthCare.gov marketplace.
Second, you may be eligible for COBRA continuation coverage, which allows you to stay enrolled in your previous employer's health insurance plan for a limited time after employment ends—although you'll likely pay a much higher premium.
For more information on either of these options, read more on the HealthCare.gov website.
Adjust Your Budget and Cut Spending
With a reduced income stream, you may have to rely on savings to make ends meet in the short term. If this is the case, adjusting your budget and cutting out certain expenses could help you stretch your savings over a longer period of time.
Take a full inventory of your finances and reevaluate your budget to adjust for your reduced income. If you expect to receive unemployment benefits, factor this income into your monthly budget once you've been approved.
Scaling back on your spending shouldn't start with the essentials. First, assess what you could go without and cut out any non-critical purchases—streaming subscriptions or dining out, for instance. As you adjust your budget, continue to go back and reassess what else could be cut. At the minimum, your budget should include the bare essentials (food, shelter and utilities) and allow you to at least the minimum payments on your debts. If you have an emergency fund, now might be the time to use it.
Depending on the job market in your field, it may take some time to find a new job, so you'll want to be prepared to financially weather the storm until then.
Continue to Make Your Debt Payments
Though your finances will need to tighten up after losing your income, it's important to continue making on-time payments in order to insulate your credit score from the impact of unemployment. If your budgeting tells you that you won't have the funds to meet your bill payments, contact your creditors immediately to see if they're able to offer you any relief options.
As the COVID-19 pandemic continues to impact the economy, many companies are extending some leniency to those who are facing financial difficulties. You may, for instance, be able to access certain forbearance or payment forgiveness options that might have been harder to qualify for normally. Your options will vary based on several factors, including the company you're dealing with, the type of bill you're unable to pay, your history as a customer and even where you live. Make sure you fully understand what a company is willing to do for you before you adjust your payments.
Look for Employment Opportunities
As soon as the dust settles and you get your finances in order, take time to think about your next career move. Looking for jobs during an economic downturn can be hard, but it's important to get the process started as quickly as possible.
As you re-enter the job market, it's important to put your best foot forward. Here are a few things you can do to ready yourself for the application process.
- Revamp your résumé. If you've been in your past job for multiple years, you may want to update your résumé to list your old position and any new skills you may have. Search the web for resume templates appropriate for your field, and update yours to meet current industry standards.
- Clean up your online presence. Regardless of what type of job you're applying for, potential employers may look you up at some point in the application process. If you're concerned about what they may see, set your social media accounts to private or at least remove any potentially offensive posts. Type your name into a search engine so you know what appears when someone looks you up. Remember that social media can also be used to help you obtain new employment and, depending on your field, you might benefit if your social media use shows off your skills and experience.
- Tap into your network. Your professional network could be the strongest tool you have at your disposal during a job search. Reach out to past coworkers, and consider contacting people you may have brushed shoulders with in a professional setting. These contacts may know of opportunities and be able to recommend you for jobs you won't find online.
The job-search process might take longer than usual during an economic downturn. If you're not having much luck finding a job in your field, look into industries that are actively hiring and consider taking a temporary position until you can settle back into your career.
Check Your Credit
Though being unemployed and receiving unemployment benefits will not show up in your credit reports, losing your job could impact your credit if it causes you to fall behind on your debt payments or overutilize debt.
During times of financial strain, it's critical to regularly check your credit reports to make sure nothing has slipped through the cracks. If you've continued to make payments on time, check your reports to ensure all your payments are being reported accurately. If you've been granted dispensations or relief from creditors, look at your accounts to see that lenders are updating your accounts accurately and reach out to them quickly if they aren't.