Losing your job can be devastating in both an emotional and financial way. It can be hard to get a recovery plan in place when you’re unable to think straight or have confidence in yourself.
I sadly saw this happen first-hand with my dad a few years ago. He lost his job and never recovered. Eventually, my parents were forced into retirement, but watching him lose hope and motivation was difficult.
To some extent, I’ve also been through it. While I’ve never been let go from a job, I did quit a job to relocate for my fiance’s career. At the same time, I decided to give self-employment a try. Going from a steady paycheck to earning nothing was hard. I felt useless, worthless, and inadequate, even if it was self-imposed.
These are normal feelings to experience when you are unemployed, but when you lose your job, it’s important to know what you should do to get back on track. Here are a few steps to take.
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Take Time to Reflect after you lose your job
Time is a bit of a luxury for those who have emergency savings, to fall back on. If you don’t, and need another job right away, feel free to move on to the next piece of advice.
It’s important to reflect on what, if anything, went wrong at your last job to keep yourself from making the same mistakes moving forward. Not everyone gets the full story or the truth when they lose a job, but hopefully you have some sort of idea as to why it happened.
Think about what you want from your career. You want to bounce back better than ever, and the best way to do that is to recognize your faults and work on them.
Again, not all firings will be the result of your direct actions, but if they were, figure out how you can be a better employee and take the necessary steps to get there. This will help you stay in a positive mindset when looking for your next job.
Don’t be Afraid to Rely on Your Network
Some people feel a little ashamed to ask their friends and contacts if they know who’s hiring. Don’t feel that way! That’s what having a network is for. Most people, in my experience, are glad to help out, especially if you’ve done them a favor in the past.
I know you’re probably sick of hearing it, but it’s who you know, not what you know. I mentioned earning next to nothing when I switched to freelancing, but thankfully, after around six months, work started picking up. Why? I reached out to people I knew, and they were gracious enough to recommend me. All of my clients were referred to me.
There’s tremendous value in having a network, especially after you lose your job. If you’re starting from scratch, go to local meetups where experts in your industry meet. Search around online for local organizations that are a good fit and attend meetings. Everyone is there to talk and network – there’s no reason to be shy.
Always be Learning
I don’t like to stay stagnant. It’s much more fun to learn things constantly. By taking on different types of work with my clients, I get to offer more services which makes me more valuable.
Building up your skill set is always a good idea, especially if you’re looking to work in a different industry.
If you think your resume is a little sparse, learning different skills and programs relevant to your industry may help you look better. There are many educational resources available that are either free or fairly inexpensive that you can use right from your computer.
Additionally, finding a fun side hustle can help you develop more skills (and gain more confidence).
Get Your Resume Up to Date
You need an updated resume to apply to jobs! If it’s been a while since you created one, perhaps a total refresh is needed.
If you’re not getting any responses, have a few trusted friends look yours over. There are a lot of free resources out there on how to improve your resume. I know it can be a pain to write, but putting in the effort is worth it, especially if you don’t have a strong network.
Have a Bare-Bones Budget
All right, let’s get into the financial side of things. Losing a job means a huge loss of income, which can lead to some panicking and not knowing what to do.
First, create a bare-bones budget featuring only the necessities. That basically means the things you need to survive, and minimum debt payments. You need to cut all extraneous expenses as they just became a luxury.
Remember, it’s only temporary. It doesn’t matter whether or not you have debt right now – living off of credit is far too expensive to be worthwhile. Again, having an emergency fund, helps take some of the pressure off if things are tight.
If you lose your job and are receiving unemployment benefits or have a severance package from your employer, be very wise with how you use these funds. Prioritize paying the bills. You don’t want to get behind and end up on the hook for late payments.
Don’t be Too Prideful
When my dad lost his job, my grandmother came to the rescue quite a few times. It was very obvious my mom didn’t want to take her help, but without her, I’m not sure where we would have ended up.
Don’t let your pride get in the way of receiving help. I know it can feel awkward, like you’re going to be indebted to someone else, but realize they just want you to be happy, and they’re probably worried. If someone offers you a gift in good will, then take it – don’t let it go to waste.
Check Unemployment Eligibility
If you were let go through no fault of your own, you may be eligible for unemployment. It’s always worth checking with your employer and your state to see if you qualify.
Otherwise, consider negotiating a severance package with your former employer. If you’ve had an excellent track record, and you’re being let go because of budget cuts or re-structuring, it’s worth asking about.
Get Your Insurance Sorted Out
Did you have insurance through your employer? You’ll need to figure out your coverage going forward. According to healthcare.gov, you can look into COBRA or a marketplace plan for health insurance. COBRA requires a payment to be kept on the same plan your employer offered, or you can enroll in a marketplace plan even if the open enrollment period has ended.
Don’t Give Up
Lastly, while I know looking for a new job is exhausting in all sorts of ways, it’s important not to give up. This is just a small blip in your life. Have confidence in yourself that you can succeed elsewhere, do what you need to do to get ahead, and surround yourself with support. You’ll get through it!
Have you ever had to face a period of unemployment? What did you do to find your next job? How important is having a good network? What is the first thing you’d recommend doing after losing a job?
Last 7 years ago, I lost my job and honestly, I didn’t expect that one. I was very worried during that time because I knew that I would face a financial struggle. Thankfully, a few months I found another job.
It’s so hard not to worry when you lose your job. Not knowing when you’ll next have a paycheck coming in really forces you to evaluate and cut your expenses.
I lost my job of 20+ years a few months ago. The key is to always have a plan B, so that you don’t have all your eggs in once basket. As you state leverage your network and update your resume. But this things should be done while you still have a job, so they are ready when you need them, not after the fact.
Completely agree – it’s really hard to properly update your resume once you’re out of the job. It’s easier to keep track of your duties while you’re still working. I’m sorry you’re going through that, though. It’s especially difficult when you’ve been with a company for so long.
My company recently went through some restructuring which resulted in about 15% of jobs being cut (about 25-30% in my area). Most people got severance, and several had new offers in hand within 2-3 weeks.
To me, this has been a lesson in keeping up my network and attempting to build alternative income streams. I think your advice is spot on.
One friend who lost his job recommended to create and maintain a routine of productivity. He increased his workout schedule, sent something like 15-20 emails per day, and started a blog. Basically simulating an 8-5 job. He found a better paying job within 6 weeks, and manage to take his whole family on a three week vacation before he started (with the remainder of his severance package, I guess).
That’s great to hear! I think that’s a good point. Setting goals and establishing a routine really helps you avoid getting depressed about the situation.
These are all great tips. A person should definitely not give up. It will show in your confidence levels if you do end up receiving an interview, which can hurt you negatively.
Exactly! Interviewers can definitely tell when you’re not confident or desperate.
It’s definitely important for people to know their emergency/bare bones budget *before* they lose their job.
We have a number in place, though I think we need to tweak it a bit in light of some new expenses.
I know what I’d have to bring in if my job ended. I’m not sure if I could quite manage to bring that in by freelancing (my only real option if I lost my current job), but at least I’d have a concrete number to shoot for. There’s comfort in that.
There is! When we moved and I wasn’t working, I set up our bare bones budget within the first month and it was actually less than I thought it would be, which was nice.
I’ve heard so many stories of people that have lost their job, which ended up leading them to a new opportunity that ended up being extremely profitable. As difficult as it is to lose a steady paycheck it’s definitely important to take some time and reflect. May what looks like a negative situation will lead to a new profitable endeavor.
Oh yeah, I’ve heard a lot of stories about that, too! Not that it’s for everyone, but losing your job can certainly push some people toward being entrepreneurs, which then leads to better opportunities.
I’ve never lost my job before, I’ve only given up my jobs by my own will, or had them run out if they were temporary employment. But these all seem like good tips if you are in this type of situation. I quit my job last week and even though I did it by choice, I still have to use some of these tips too, like the bare bones budget.
I totally understand as I did the same thing last year. Having that bare bones budget really helped make me feel more confident we could cover our necessary expenses.
I’ve lost my job 2 months ago,I pay Alimony(child support), and it is hard to find a job when you thinking about that you must pay it or ending in jail for not paying the alimony.
But in the good way I found an old adsense account with $17 so for now, i added it to my blog to earn some cents here and there 🙂
I’m so sorry to hear that – I can’t imagine how stressful that is. Also glad to hear you’re trying to find a solution! Good luck in your search.
I lost my job 2 years ago, but it was kinda a plan and was ready for it. My savings backed me up and I didn’t feel the need to get a job back then. What this experience taught me was it helped me realize the ideal job I wanted to be in.
Having savings is so critical in a situation like this. As you said, you can focus more on getting the job you actually want when you’re not pressured and desperate.