The 'lose your job' exercise you need to do

You could lose your job tomorrow. I'm not trying to jinx you. It's just a real life possibility for anyone, at any time. Jobs are lost all the time. It happens. Are you prepared for it? What would be your first step? And the second? What about the third? Just like insurance, planning for the worst isn't asking for it, it's just smart. Here's my 'so you lost your job' exercise, the four items you need to deal with when you lose your job, in order.

Your 'I lost my job' plan of action:

1.a - Income:

The first obvious obstacle when you lose your job is income. Your mission is to find a new job to replace this income. If you get a severance package don't take a three month paid vacation. Start looking for work immediately. Also, if you qualify for unemployment, by all means file! The max payout in Indiana is $390 a week. This may or may not be enough to pay your bills, but it can't hurt.

1.b - Health Insurance:

Maintaining healthcare coverage is equally important to replacing your income. There are a couple of ways to stay insured while unemployed. COBRA is a government act which helps you maintain coverage during unemployment. The only downside is it's expensive. If you are let go during open enrollment your better bet is to search the healthcare.gov marketplace for cheaper coverage.

2. Life Insurance:

Most people are guilty of viewing life insurance as an afterthought. And if your employer has provided it for you, you probably haven't thought twice about it. Well, now you have to start thinking. You may be able to convert your policy, if you can, do it. If not, call your insurance agent and add a life insurance policy. The type you get really depends on what you and advisor decide is best for you, I'm most concerned with the face value of the policy. Getting the right amount is most important.

3. Retirement Plan:

I'm in the minority of advice-givers on this one. You've seen the billboards, "Let go? We'll help you rollover your 401(k) today!" But it's my opinion that this is way down on your priority list. Here's the thing, if you leave your 401(k) for a bit, nothing will happen. Your employer can't take your money, you won't lose it. It just sits there. You just lost your job, you're a little busy. You have a lot of balls to juggle for the next few weeks. Let your 401(k) be for the moment. It's not going anywhere. Eventually you'll need to deal with it, but get the three other things on this list taken care of first.

Your financial life can change in one instant. There's no denying it'll be rough going for a bit, but by switching into action mode you can prevent further damage. Not a reader? I get that. Listen to me work through this action plan on The Pete the Planner Radio Show on WIBC below.