Have you ever planned to lose your job?
We’re not talking about where you resign or give a 2-weeks’ notice – we’re talking about being unexpectedly laid off or terminated. Losing your job suddenly and without warning can feel like a punch in the gut – you are caught completely off-guard and you don’t know what your next move is.
This pain has never been more relevant than in today’s pandemic environment. One month, everything is doing fine, and businesses are running as usual. The next month, thousands of businesses are shut down, the workforce has been reduced dramatically, and for those who still have a job, their salary has been cut.
When you lose your job unexpectedly, you feel pain in different ways – your pride, your confidence, and your self-image all take a hit. However, the most powerful pain you can feel is the anxiety related to your finances. You used to have a consistent income that you could rely on to pay your bills and buy groceries, and now that income has been taken away.
You’re feeling lost, confused, and stressed about the future. Fortunately, even in these uncertain times, there are ways you can manage your money to keep yourself going. We want to share 4 ways to manage money after a job loss.
Apply for Unemployment
Applying for unemployment has been looked at negatively with some people saying they’d never file for unemployment. In your situation, you must change your mindset. Unemployment was created specifically to help people who are not currently working so they can receive some sort of income until they get another job. Apply as soon as you can so you can feel secure that, regardless of how long it takes, you will receive some income in the meantime.
Budget Like Your Life Depends on It
The next step in managing your money is understanding your budget for your essential expenses – anything that will help you survive (food and shelter). You must eliminate any unnecessary spending, and the first step is to start at zero and figure out how much your expenses are for your main bills – rent, bills (electricity, water, etc.), and groceries. “Groceries” here means food to eat – not unessential items like expensive coffee or sweet treats. You don’t know how long you’re going to be unemployed, so you need to make every penny count.
This also includes using any savings (”emergency funds”) you have available. Note – there is a difference in savings and a 401k or retirement plan. Using a 401k or Retirement Plan before retirement age (59 ½) means you will pay penalties and therefore not get your full amount (which you earned). Stay away from the temptation to use anything from your 401k/retirement fund unless it is an absolute emergency.
Your Job Now is to Find a New Job
Once you find yourself unemployed, you have a new job – getting yourself back into being employed as soon as possible. There are many opportunities out there for different types of jobs – you may be able to find a new full-time job that you could feel more fulfilled in. You may find temporary jobs or part-time gigs to keep you working until you find a more consistent job. Any income you earn is an improvement over earning nothing, and since you may be making less than you are used to, it will be a great wake-up call for the need to budget and spend money wisely.
Get into the Right Mindset
This is the most important point out. Once you lose your job, you will be hit with a flood of thoughts and emotions – anger, anxiety, sadness, hopelessness – these negative feelings can affect you and prevent you from pushing forward.
Before you do anything, you need to evaluate your mindset and how you are going to approach this situation. It will be easy to choose to sit around feeling sad for yourself with no desire to put any energy into working towards a solution.
Feeling sorry for yourself will keep you in a state of stillness where you are not taking any action to help yourself. When you find yourself in this situation, push away any negative thoughts or feelings. Focus on taking every action to fix the solution and improve your life as soon as possible. It’s ok to feel sad or angry or scared – just don’t let it keep you from acting.
Dealing with a job loss is scary, and the uncertainty of a secure financial future can make you feel like you have lost and have no chance of succeeding. Stay in control of your thoughts and choose action over inaction. Research and use your local and federal programs, look at every penny you spend is a penny towards your survival, and focus on getting back on the right track.