There’s no doubt about it: it sucks when you’ve lost your job. Job loss is stressful under normal times, and even more so with everything going on right now. We’re living in some unusual times, to say the least.
So what can you do when you lose your job?
First, whether or not you have emergency savings to fall back on, tuck these scary feelings away for the future. Because you can use them later to completely change your life for the better. (Long term unemployment was what got me off the path of debt to a very positive place. I used how I felt during that time as motivation to do everything I could to never be in that position again.)
I won’t lie to you: Dealing with job loss is going to be hard. But you can get through it.
Meanwhile, what can you do in the short term if you’re in the US? Here are 11 things to look at doing when you’ve lost your job.
1. Apply for unemployment when you’ve lost your job.
The very first thing to do is apply for unemployment. You may be able to do that online or over the phone, depending on where you live. You can find out where and how to do so here.
Do NOT wait to apply, because some states have strict deadlines and even if they don’t it normally takes time to get benefits. Also, do not be surprised if your case is denied the first time you apply. Just file an appeal right away if that happens.
Unemployment benefits usually come from payroll taxes, and you deserve the money if you lost your job through no fault of your own. (Also, when you’ve lost your job, you need all the money coming in you can find. File right away.)
Due to the current crisis and the newly-passed CARES Act, unemployment access has been expanded right now. The act creates a new unemployment assistance program for 2020. This aims to help the self-employed, independent contractors, gig workers, and those who can’t telework or work at all due to the current public health emergency.
It also gives an extra $600 a week to each qualified unemployment recipient for 4 months beginning April 1 through July 31, 2020. That’s huge, especially in states like Arizona where the most you can normally get from unemployment is $240 a week. Plus it adds an extra 13 weeks of unemployment when needed.
In some cases disaster unemployment insurance may be available too. So look to see if that applies. Right now, if you have a small business, you can look at the Paycheck Protection Program. (A good explanation of that is here..)
Once you are able to get unemployment, be sure to do whatever they ask to keep meeting their requirements.
Once you’ve applied for unemployment, take a moment to breathe. There’s nothing wrong with doing nothing for a day and feeling however you feel. It can be a shock to lose your job, and it’s never fun. (Even if you hated your job.) Taking a little time to acknowledge how you’re feeling can help you going forward. But do take action after your day of rest.
3. Get health insurance.
Losing a job is generally considered a qualifying event, so if you have a spouse with insurance benefits, you should be able to get on their policy. If you don’t have a spouse or they don’t have health insurance, there are other options.
If you worked for a private company with 20 or more employees that offered a group plan, you should be offered COBRA insurance. (COBRA is short for the “Consolidated Omnibus Budget Reconciliation Act of 1985” law.)
If you say yes to that and pay the costs, it keeps you on the health insurance plan for up to 18 months (and sometimes longer.) The catch is you have to pay up to 102 percent of the cost of the plan to get it. Note that the 102% is the cost of the plan to your old employer, not 102% of whatever you might have been paying as your share. So it will cost more. (HR will tell you the exact amount.)
You have 60 days to decide whether to say yes to COBRA coverage, so at the very least, don’t decline COBRA coverage it until that time is up. You have time to look at the other options that are out there, so use it wisely. Find what’s best for you.
Other health insurance options are:
- Signing up for a plan on the Health Care Marketplace. (Losing health coverage is a qualifying event, so you can sign up for a plan even when open enrollment is closed.)
- Getting on a state-sponsored health insurance plan if one is available where you live.
- Getting back on a parent’s plan if you are under 26.
- Seeing if you or your kids are able to get Medicaid or CHIP.
- Joining organizations that offer group insurance to their members at a good rate.
- Getting a catastrophic plan that only covers a few big things. (The first time I ever needed surgery was when I was unemployed. That would have been an even bigger setback if I hadn’t been able to get on a catastrophic plan.)
Sometimes people may also join a health sharing ministry. Some people have had good experiences with that, and some people have not. The main thing to remember is that health sharing ministries are NOT health insurance. Many require you to be of a certain faith. (Liberty Health Share does not.) There are also some problems with health sharing to know about.
4. Cut back as much as you can on spending, starting now.
Go through every item in your budget and try to cut back on or cut out as many things as you can.
(If you don’t have a budget, use this free budget spreadsheet to get an idea of where you might cut. And then starting using it or something similar going forward.)
Many people wait to cut back, thinking they will find another job quickly. While that may or may not be the case, the time to cut is right away. Better to add things back in later if things turn out well than to need the money later and not have it.
In one sense, the current times will make cutting back easier. There’s no pressure to go out with friends, and it’s best for everyone to stay home anyway. Staying home is for the public good, and you certainly won’t be alone in doing so.
I’m not saying you should do nothing while sitting at home, but you probably CAN spend less in many areas and still keep basic services like internet and cell. Ask for deals and see what you can do to cut costs in every area though. Here are a whole bunch of money saving tips that could help.
5. Polish up your resume and start your job search.
Update your resume and post it on sites like Monster.com and LinkedIn. Review listings for jobs you could do, and make sure your resume uses those keywords.
If you have odd or vague job titles for old jobs, include the normal matching titles in parentheses so the computer scanning your resume will know what you did.
While you’re at it, get back in touch with old contacts, since it’s common to find jobs through people you know. Provide some information that could be useful to them, and let them know that you’re looking for a job at the same time. (It’s always fun to get back in touch with people anyway, so this can’t hurt.) Make sure that your references are still willing to be references, and that the contact information you have for them is still correct.
Don’t just tell people once that you’re looking, either. Don’t be a pest, but do ask family and friends every couple of weeks if they’ve heard of any openings. It’s easy for others to assume you’ve found something, or just to be caught up in their own lives. You have to keep putting yourself out there.
Prep for interviews now in general, and in particular before you’re called in. Read this whole post on how to slay job interviews and do those things.
6. Look for other ways to make money.
Jobs aren’t the only way to make money. With the current crisis, you may not be able to do many of the usual things to make extra cash. But you may still able to do some of them (for example, teaching English online.)
Look at all of the skills you have and see how you could use them to bring in some money now. Are you good at sewing? Maybe you can make non-medical masks. Do you know how to keep kids happy for hours with crafts? Maybe you could sell directions. Are you a good cook? Maybe you can teach a class online.
Don’t spend money to start doing things like this. Just let people know you can do it and see if they or anyone they know are interested. Again, keep putting yourself out there. Marketing is not a one and done kind of thing.
Beware of scams or people who promise to help you make money but who need money from you to do it. Here’s how to avoid make money scams. This is not the time to invest what money you do have in something that may or may not pay off. (Stay far away from things that promise or guarantee to pay off.)
Look at what you have in your house too to see if there’s anything you can sell or use to pay bills. For example, do you have gift cards laying around? Dig them out and use them.
7. Put your bills in order of importance.
No one knows how long a job loss will last. I lost my job during the whole dot com bust and the 9/11 aftermath. It took me nearly 4 years to find another one. I don’t say that to scare you — I hope you find work quickly — but it can be smart to act like your money has to last you a long time.
That means putting your bills in order of importance. Food and someplace safe to stay should be top of the list. Things you will not literally die without are less important. Unsecured debt (for example, credit card debt) is least important of all.
Speaking of debt, if you’ve lost your job, do not pay extra on your debt. Make only minimum payments. Eating and having somewhere to live are most important. Do those things first. You and your family matter most. If you have to choose which debts to pay, pay things like your house payment first.
You are not a bad person if you can’t pay any or all of what you owe. You are human in a bad situation. Note that you can’t be sent to jail for not paying debt in the US. You can be sent to jail and fined for not going to court or for not filing taxes though, so do file your taxes (call the IRS if you can’t pay) and do go to court if you’re summoned or sued.
8. Look for help.
With the current crisis, many, MANY people are going to need help. If you can help others (even if it’s just by talking to them or sending links to resources), do. You are a valuable person no matter what your job situation.
If you need help yourself, ask for it.
I know it can be really hard to ask for help, but think about this. It feels good to help others, but that means there are people who need to be helped. So by asking for and accepting help you are actually helping others to feel good too. We are all in this together.
Where do you find help? Check with your city, your state, the the federal government, your neighborhood group, your local Buy Nothing group, your friends, and your family. And here is a huge list of financial assistance resources.
Apply for anything you might qualify for, now and again later if your situation or rules change. Use food banks, put your student loans in deferment if possible, etc.
If you have an emergency fund for job loss, this is the time to use it.
If you rent, tell your landlord that you lost your job. (Especially if they are an individual landlord.) See if you can work out an arrangement. Evictions are being suspended in some areas right now, as are utility cutoffs, so that may help you worry a little less if that’s the case in your area. Check with your city/state to see what’s happening where you are.
If your mortgage is being foreclosed on, find out how long you can possibly stay before you are forced to leave. Foreclosure is not a fast process, and during the 2008 mortgage crisis it got even slower. It’s possible this could be similar.
9. Use your flexible spending money.
If you had a flexible spending account, thanks to the Uniform Coverage Rule you can still file all those claims you hadn’t gotten to yet. Even if they’re more than the amount you put in to the account before you lost your job.
What does that mean? Suppose you signed up to contribute $1000 to your flexible spending plan this year, but you got laid off on January 31st. You would have only contributed $83.33 to your plan by then, but you can still be reimbursed for the full $1000 if you had those expenses before leaving your job. So submit all of the eligible expenses you have. Go through your receipts and get reimbursed for as much as possible.
10. Take care of your 401k.
If you had a 401k account, you generally have three choices on what to do with it when you leave. You can:
- Probably leave the money where it is
- Roll it over to an IRA (a direct rollover is best)
- Take it out and pay a ton of taxes on it plus maybe a penalty.
Let me just say, you probably shouldn’t do number 3! Spending it is a bad idea, for so many reasons. Roll your 401k over to an IRA instead (unless your 401k offers great options, in which case you might consider leaving it there.) If you’re retirement age and retiring, you may want to look into requirements for using the money in your 401k.
This article is about whether it’s a good idea to use your 401k to pay off debt but it has some info in it that applies to this case too. Remember that in many cases retirement money is protected from creditors. You will likely need it more in retirement than you need it now, even though it may not feel like it. Don’t throw good money after bad.
11. Take care of yourself
Finally, take care of yourself. Losing your job (and any kind of big change like that!) is always stressful. Take the time to exercise, get plenty of sleep, and eat well.
I hope you are able to find work quickly after you’ve lost your job. If it helps, know that right now the most important things are your health, your family’s health and safety, and the public’s health.
These are unusual times, and I suspect the government will need to help a lot of people. Take care of yourself and do your best. You can get through this.