If you have ever fallen down and had the wind knocked out of your lungs, then you know what the beginning of panic feels like. You want to breathe, but you can’t. You are a bit stunned by the fall. You lay there hoping that some strange animal instinct kicks in and you remember how to produce breath again. While all this is happening, panic is creeping in. The crazy “what if’s” start.
If you have ever suddenly lost your job, then you most likely have experienced the same “wind knocked out of you” feeling. You need a plan. Here’s a plan.
- Immediately take inventory of your benefits- Most people take their benefits for granted. Whereas people generally value their health insurance, rarely do they value the rest of their benefits (e.g. life insurance, dental insurance, legal services, etc).
- Create a list of people to talk to- You are now a part of the group of people seeking employment. This is a vast, diverse group of people. Your job is now to prove why you are better for a particular job than anyone else in this group of people. This means that you need to make a list of people than can help you get the job that you want – quickly. The list should include: former colleagues, competitors, industry experts, influencers, and confidants. This isn’t a desperation move. This is an extended version of “putting feelers out.”
- Don’t ignore your money problems- You are undoubtedly stressed out. Your lack of job means that you have a lack of income. Don’t bury your head in the sand. You must become hyperaware of your financial life during this time. You must come to terms with all of your debt, all of your expenses, and all of the assets that may assist you during this challenging time.
- Use your emergency fund wisely- How long until you find another job? I don’t know either. You must ration your emergency fund. If you are receiving unemployment benefits, then you must supplement these benefits with your emergency funds.
- Don’t borrow money- Fight like hell to prevent your family from going into debt. Your unemployment is temporary, but you can’t let the financial problems created by your employment linger on forever. Your lifestyle SHOULD change significantly if you are unemployed. Borrowing a single penny (using a credit card) on unnecessary expenses while unemployed is foolish and inexcusable.
Feel free to get mad, but keep your head. Make sure you are channeling your emotion towards problem solving. In fact, here are the top three skills/characteristics that you need to employ as you seek employment
- Problem-solving skills– You have a major problem. To put this very simply: you have a major problem and you need to find a major solution.
- Confidence- This may be the lowest point in your life when it comes to confidence, but you need to ignore this. You can’t expect anyone to hire you if you lack confidence. Do whatever it takes to build confidence. Challenge a toddler to a foot-race. Arm-wrestle your dog. Just hit the job-seeking process with confidence.
- Humility- You may have loved your job, thus losing it may have caused you great disappointment. In addition, you may not like the new job prospects that are on the horizon. Approach your new reality with humility.
Job loss affects your financial life, but that doesn’t mean that you should only make decisions based on money. If you can survive during one of the most difficult times in your financial life, then you will thrive when things turn around. Be purposeful.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.
10 thoughts on “What to do if you lose your job”
Or what you really meant to say was do all of that now before you lose your job so you can transition quicker and easier. Also doing all of this now may lead you into a better position personally and professionally that you didn’t even know existed.
This is good. Very good. I would add: during unemployment is not the best time to change careers or start a business. Find a job, even a crappy job, and plan later to strike out on your own from a position of security and confidence.
Call your creditors, if you have any, and see if they will let you defer payments. Student loans and car loans will usually let you do this for a few months. If you owe hospital or doctor bills, they will often write them off or offer a very reasonable payment plan. Pride is not your friend.
I agree partially with Chris that making a list of people that can help you is a smart idea before you become unemployed, and with Lora that pride is not your friend in this situation. Not ignoring your money problems is probably the hardest part about this– do you have any practical advice on how to deal with the emotional and mental anguish?
I would suggest not calling yourself unemployed. Take a skill that you use in your career and find some way to use that skill in an official manner. Maybe you use it to volunteer or perhaps you teach the skill to someone who could use it. Maybe you just blog about it.
Not only will the skill remain fresh but hopefully you will be creating anecdotal information that you can use in your next interview.
It also gives you a much more interesting answer to the question, “What do you do?” when your normal response of your career is temporarily on pause.
Also, while I say not to call yourself ‘unemployed’, you should most definitely let people know you’re looking. Telling someone you’re unemployed makes both of you feel bad.
When I became ill and had to leave the work force on disability, I wasn’t sure if it was going to be temporary or permanent. I spent the $80, or whatever it was to file for a fictitious name for a business, so if there was going to be a long stretch of unemployment on my resume, I at least had something to fill it. (I never was able to return to work full time, but at least if I had, I had that potential awkward empty space on my resume covered.)
Lynn, that was creative but dishonest. Instead of the $80, how about volunteer work? There is volunteer work you can do from home. You would be helping someone else, which lifts your own spirits, as well as filling in that gap on the resume.
I wasn’t dishonest. I had professional stationary, business cards, and all of the other items required to actually DO the kind of work for the business that I had legally started. I did some client solicitations but unfortunately, what I did for living was greatly affected by the recession. I did have a dedicated office in my home, and could have handled a client or two perhaps, depending on the task. Even on full disability you are allowed (and even encouraged) to work a little. You aren’t allowed to earn very much, but it does keep your brain active just in case your body decides it’s going to ease up so you CAN go back to work full time. Unfortunately, my disease is degenerative so while I may have good days or even a week or two, I’m never going to get better at least enough to return to the working world full time. I’d worked for the same company since 1998, and even though I can only work 7 to 10 hours a week, my boss still keeps an office for me, and I guess my usefulness comes in the form of being the firm’s historian, as it was established in 1997. And I can help to mentor my much younger, but very intelligent replacement so I know the firm is in great hands.
Those are some great tips Pete. I experienced job loss last year, and took it as an opportunity to pursue a career change into something I am passionate about. Wouldn’t have been possible without doing the steps you listed above. Hope they help other folks as well.
Glad you were able to turn things around, Benjamin!