Losing your job can be devastating financially and emotionally. I have been laid off from work several times and it creates a flurry of emotions. It’s easy to allow it to become destructive, but that often makes the situation worse.
It’s natural to worry about job loss in challenging economical times. It’s also easy to believe things won’t improve. Thankfully that’s not the case. Time will heal what you’re experiencing, but you must have a plan.
Our guide shares the steps to take if you’re about to lose your job to help you get back on your feet.
What Should You Do After You Lose Your Job?
It is rarely a good thing to be laid off or lose your job. While it’s important to know why it happened, you also need to move on to find another employment opportunity.
Here’s what to do when you’re laid off and need to get back on your feet.
1. Take Inventory
Panic is inevitable after losing your job. You may wonder what you did wrong or how you’re going to put food on the table.
It’s natural to feel that way. To deny yourself those feelings often results in lying to yourself. Now is the time to draw any potential learning opportunities to take with you for the future.
As you come to grips with the reality, it’s essential to determine why this happened.
Was it because your company was experiencing tough times? Or, was it a skill you lacked the employer was needing?
There’s not much you can do about the need to cut costs. If it was a skill you lacked, maybe it presents a future opportunity to develop a new skill.
Regardless, it’s important to extend yourself some grace. Job loss occurs for many people and it’s a natural part of life.
Remind yourself of that, then make a commitment to move forward in your job search.
2. Review Your Final Paycheck
After a firing or layoff it is vital to review your final paycheck. It may include items you may not normally see on it.
You may see additional compensation for earned vacation or sick time, commissions, or back pay. If you received a severance package you may also see funds for that.
This extra money can be helpful in extending the time that you’ll need to tap your emergency fund. Your paycheck may also be less than what you typically receive.
Don’t just let your pay hit your bank account and forget it. Analyze it as it will likely direct your next courses of action for your finances.
If you have any questions, or something is missing, contact human resources at your former employer. They will be able to answer any of your questions.
3. Determine When Benefits End
If you’re like many Americans, you receive benefits like health insurance through your employer. Nearly 155 million non-elderly people receive health coverage through their employer, according to Kaiser Health.
If you’re one of those people it’s essential to know how long the coverage will remain in effect. In most cases it’s until the end of the month, but it may be you leave.
Your former employer may also extend it for a length of time as a part of a severance package.
Determine the exact date it ends, especially if you or a family member need care or a prescription filled.
You will receive a mailing for the Consolidated Omnibus Budget Reconciliation Act (COBRA) soon after your end date. This lets you extend coverage for a certain length of time.
You may want to take advantage, but keep in mind that you must pay the entire cost.
Other benefits to keep an eye on include:
- Dental insurance
- Vision insurance
- Voluntary life insurance policies
- Retirement plans
Every employer is different, so it’s vital you determine when all benefits you regularly use end and look for ways to replace them if you need.
4. Get Real With Your Finances
It can be difficult to manage your money after a job layoff, but it’s not impossible. If you don’t have a new job immediately lined up, it’s important to take a realistic look at your financial picture.
You need to look at your monthly bills and find ways to aggressively reduce unnecessary expenses. Not doing so will have a direct impact on how much you must pull from your savings account.
If you don’t live on one, now is the time to create a budget. It should focus largely on essentials – shelter, food, utilities, and transportation.
It’s challenging to budget with a limited income, but it can be done. The closer you pay attention to your finances now will only help you in the long run to get back on your feet.
5. File for Unemployment
If your job loss was of no fault of your own, and you don’t know when you’ll receive a new job it’s time to file for unemployment benefits.
Don’t feel shame for doing so, as it’s there for this reason. Each state has its own requirements for who is eligible for unemployment, so benefits will vary.
The Department of Labor is a good resource to use to determine what you may receive. You don’t receive benefits immediately, so it’s important to file as soon as possible.
Additionally, you may want to consider a side hustle or part-time job to supplement your income. DoorDash is a good option that lets you deliver restaurant meals on a flexible schedule.
DoorDash drivers can get paid $23 per hour while on a delivery. Pay is weekly or you can withdraw earnings instantly for a small fee.
Read our DoorDash driver review to learn more.
Just be careful as you can only earn a certain amount before it reduces your unemployment benefits. Ask the Department of Labor in your state to determine that amount.
Get paid $23 per hour while on a delivery!
Deliver food with just a car or scooter. Get started today!
6. Make Daily Connections
Staying connected and getting the word out that you’re looking for work is vital after losing your job. Now is not the time to stay idle, it’s time to act.
After taking inventory of your situation you want to find a routine in your job search. You will want to update your resume to ensure you’re putting your best foot forward.
Make it a goal to make at least one professional connection daily. You can do this by reaching out to head hunters or attending networking events.
Using LinkedIN should be a daily habit and is a fantastic resource to make connections and learn more about companies.
Yes, you can use online job boards like Indeed to apply for jobs, but it’s the personal connections you make that often are most rewarding.
7. Move Your 401(k)
The most important thing to take from your old job is your 401(k). It’s easy to forget your retirement plan when you leave your job, but it can be costly.
An old employer may move you into more expensive funds. Alternately, they may charge additional fees that will eat into your retirement savings.
Unfortunately, many Americans ignore doing anything with their old 401(k) plans. Nearly $1.4 trillion was left behind in old 401(k) plans, as of June 2021 according to Yahoo Finance.
If you have a 401(k) at your former employer now is the time to move it. You have multiple options, from moving it to the 401(k) plan at your new employer to opening a rollover IRA with an online brokerage.
If you don’t know what is best to do, Blooom is an excellent resource to use. They will give you a free analysis of what’s in your plan and help you decide where is best to put it.
Just remember not to cash out the 401(k). You will likely forfeit a significant amount of the money in taxes. If you need the funds, look for other ways to make money or seek unemployment benefits.
Losing a job can be traumatic. It’s important to remember not to give up and take one day at a time.
Once the initial shock is over, make an action plan to manage your finances and start your job search. Doing both will help guide you into the next stop in your career.
What is the first thing you’d recommend doing after losing a job?
*Actual earnings may differ and depend on factors like the number of deliveries completed, time of day, location, and expenses. Hourly pay is calculated using average Dasher payouts while on a delivery (from the time you accept an order until the time you drop it off) over a 90 day period and includes compensation from peak pay, tips, and other incentives.