As the world economy continues to struggle and the fear of a recession looms, many companies are cutting labor costs and announcing massive layoffs. While some may have anticipated it, others who were not expecting it now face a difficult situation. But rather than dwelling on what has happened, there are crucial things you need to do to protect your finances after you have been laid off. If you have suddenly found yourself out of a job, here are the next steps you need to take.
5 Things To Do When You’ve Been Laid Off
If you were recently laid off, you’re not alone. It’s completely normal to feel upset, worried, or anxious about what lies ahead. However, there are a few things you can do to improve your professional and financial outlook. These tips will help you to stay afloat and get through this tough time.
1. Apply for unemployment.
First and foremost, you need to find a way to secure income until you find another position. So, your first step is to apply for unemployment. Benefits vary between states and the monthly income will depend on how much you made in your previous position.
To find out more about the specific benefits in your state, you can check online for information about unemployment benefits where you live. The website can tell you more about filing schedules, the peak hours you should avoid, and apps to help you process your claim more quickly. It can be difficult to accept help. But, remind yourself that this is only a temporary solution.
2. Find health insurance.
The next item on the list will protect both your financial and physical health. Since many Americans’ health insurance is tied to their employment, their contributions to your coverage will end when you have been laid off. So, you will probably need to find your own health insurance plan.
When it comes to health insurance for the unemployed, you have a few options. Employers can extend your current benefits under COBRA. However, this can get expensive since you will be responsible for the full premium. Instead, you can also shop the health insurance marketplace for affordable, short-term plans. And depending on your situation, you may qualify for Medicaid benefits. This option provides low to no-cost copays and premiums for those on a limited income.
Things are already hard enough without a steady source of income. Therefore, you don’t need the added pressure of paying medical bills without insurance. Ensuring that you have health insurance, especially during cold and flu season, is one way to prevent yourself from going into debt.
3. Evaluate your budget.
As we work our way down the to-do list, the next step is to evaluate your monthly budget. Anyone who has been in this position before will tell you that your budgeting skills will never be more important than when you have been laid off.
Since you will have to live on limited resources, you need to be smart with your money. If you have an emergency fund, then this is a good time to use it to cover your immediate expenses. However, you don’t want to deplete your savings. So, you’ll need to find ways to make your money last.
First, determine your bare bones monthly budget and how much you are currently spending. If you need to reduce your spending, identify and eliminate unnecessary expenses. It can be uncomfortable at first. But, you need to find ways to trim the budget.
4. Notify everyone who needs to know.
For me, this step has always been the hardest. But, I reminded myself that there is no shame in being laid off, especially when it is due to circumstances beyond your control. Eventually, you will need to let people know what’s going on.
If you have a partner, they should know from day one since it will also affect them. However, it’s also important to share this news with family and friends. Those who love you will want to support you and help you through this difficult time. While some may offer financial help, there are other important ways they can be there for you as well. My family and friends were a huge source of emotional support, but they also offered assistance with my resume and job search, child care, rides, meals, etc.
You should also notify your lenders and service providers of changes in your employment status. If they are aware of your circumstances, they will be more willing to adjust payments and work with you when they have advance notice. This may alleviate some of your financial obligations by lowering your monthly payments and helping your money go further.
5. Make yourself marketable.
If you want to improve your chances of finding another position quickly, then you need to make yourself marketable. Most people start by updating their resumes and posting them on several job sites. This makes you more visible to prospective companies. However, you can also search through available positions and apply online.
Another way you can make yourself more marketable is to launch your own portfolio website. You can include a digital resume and examples of your work to help you stand out.
You can also use this time to add a new skill to your resume. There are tons of free online resources where you can receive training from top companies and Ivy League universities. If you go this route, choose something that relates to your chosen career field to make yourself a stronger candidate.
Finding Ways to Generate Income
The ultimate goal is to find full-time employment. But, it can take time. There were periods in my early adult life when I spent months out of work and scrambled to pay my bills. So if you are struggling like I was, consider finding other ways to generate income.
For those who need money now, here are a few ways that I was able to bring in extra cash.
- You can look for work as a freelance contractor through platforms like Upwork and Fiverr.
- There are also temp agencies that will place you with companies that have an immediate need for help.
- Consider starting a side hustle like DoorDash or Uber Eats to generate income.
- Advertise your availability for manual labor such as yardwork or cleaning services.
- Complete online surveys for some extra pocket money.
While these may not be your ideal source of income, they can relieve some of the financial pressures until you find something more permanent. These times in my life were some of my lowest points. However, I also discovered that I was resilient and strong enough to survive tough times. Although you may be feeling stressed and vulnerable, keep your chin up. In the end, all your efforts will pay off.
- Build Your Emergency Fund
- Re-Igniting Your Finances: 4 Ways to Deal with a Job Loss
- How to Help Family and Friends Who Are Financially Stressed
Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.