Money Smarts Blog

An unexpected job loss can be hard to cope with, especially if you don’t have a solid emergency fund to support you. If you’ve been laid off or fired there are several things you should do right away – like figure out your health insurance, get your spending in check and make a plan for you 401(k). If your head is swimming trying to figure out next steps, don’t worry. We’ve put together a list of what you should do when you lose your job unexpectedly:

1. Take a deep breath.
   It’s completely normal to feel overwhelmed with emotion when you find out you’re being laid off or fired. Whether you’re angry, stressed, depressed or anything else it’s important to give yourself time to acknowledge your feelings and process them in a healthy way before making any rash decisions. Take a deep breath or two, go for a run, or talk it out with a friend or family member.
   
   
2. Don’t burn any bridges.
   While you’re processing that emotion, make sure you’re not using it to ruin any relationships – past, present or future. You never know who you’ll meet again in life, so resist the urge to vent on social media or send a scathing email to your boss. You might need a reference or find yourself working for or alongside someone from the same company later.
   
   
3. Don’t start calling in favors right away.
   Give yourself some time to process the lay off before spamming your connections on LinkedIn or announcing you’re looking for a new position. Take time to get your resume and references in order so you’re prepared if someone does have a job lead for you.
   
   You’ll also want to make sure your announcement/request isn’t tinged with anger for your former boss or company. No one wants to hire someone they think might slander them or their company later.
   
   
4. Talk to HR about the details.
   Depending on the circumstances of your lay off you may receive severance pay, or get paid out for any unused vacation time or sick pay. If you didn’t think to ask about these things or weren’t told before you left, it’s okay to call the human resources office to get the information you need. Just remember to be polite and stick to the point.
   
   
5. Read anything you’re asked to sign.
   You might be asked to sign any number of documents before you leave the office, so make sure you read them carefully to avoid agreeing to something that will hurt you in the long run.
   
   In some instances, you might be asked to sign a document agreeing not to work in the same field or for a similar company for a set period of time (a non-compete agreement) in exchange for severance pay or continued benefits. If you are asked to sign a non-compete in exchange for benefits, ask if you can take some time to consider your options.
   
   Ask detailed questions if you’re unsure of anything and only sign if you’re absolutely sure what you’re agreeing to.
   
   
6. Make a new plan for your 401(k)/retirement plan.
   You may want, or be required, to remove your funds from the plan sponsored by your former employer. Make sure you put those funds back into another approved retirement account within the legal time limit to avoid paying a penalty for early withdrawal.
   
   Once you’ve received your final paycheck, take some time to find out how much you’ve already contributed for the year before you start a new position with a 401(k) option to avoid exceeding your annual contribution limit
   
   Lastly, if you’ve taken out a 401(k) loan that you haven’t paid in full, understand that you may be required to repay sooner than you planned.
   
   
7. Figure out your health insurance.
   If losing your job means losing your health insurance coverage, you’ll need to figure out a replacement ASAP. If you’re married, it may be prudent to switch to your spouse’s plan for the time being.
   
   You may also be qualified for COBRA, a government plan that allows for continued health benefits through your former employer’s group plan for a limited time, or an individual plan through Obamacare.
   
   
8. File for unemployment.
   If you weren’t terminated for cause, i.e. fired because of something you did, you may qualify for unemployment benefits. If you’re not sure if you’re qualified or how to go about filing, it’s worth paying a visit to your local unemployment office.
   
   
9. Review your finances.
   Take a minute to go over your current savings and expenses to determine how long you can live on what you currently have saved. Whether this loss of income makes a significant impact on your finances or not, now is a good time to get your spending in check. Don’t buy anything you don’t need until that income is replaced.
   
   
10. Work on your resume.
    You can’t get back out there until you get your resume together, so make this a focus. Update your job descriptions and relevant certifications. If you left on good terms, ask former employers for a recommendation and let them know to expect a call or email when you start the job hunt.
    
    If it’s been a really long time since you’ve had to worry about your resume, you might want to get some outside opinions on how to effectively update yours. If you can afford it, seek resume help from a professional who can help ensure you’re including the right information. Or, look for free options online.
    
    
11. Start a job search.
    Once your resume is in order and you’ve locked down some positive references, it’s time to put yourself back on the market. If you can afford a career change, this might be the time to do some soul searching to decide if you’d rather continue down the path you’re on, or look for a different line of work.
    
    Either way, when you’re unemployed searching for a job is your full-time job until you find one. It can be tempting to use this time to catch up on all those Netflix Originals you’ve yet to binge, but that won’t bring home the bacon.
    An unexpected job loss can cause a lot of stress, so take some time to process and figure out your finances. You may find that going through the activities on this list help you feel a little more in control.  If you feel like you’re facing down a financial crisis due to loss of income, IHMVCU and Greenpath can help you with your financial health.

An unexpected job loss can cause a lot of stress, so take some time to process and figure out your finances. You may find that going through the activities on this list help you feel a little more in control.  If you feel like you’re facing down a financial crisis due to loss of income, IHMVCU and Greenpath can help you with your financial health.