Many people who get laid off don’t see it coming. They thought they had a steady job. They thought they could plan for the future. But in a moment that future changed. Everything was suddenly uncertain.
If you’ve been laid off, it’s normal to feel a little anxious. It’s normal to worry about where your next paycheck is going to come from and how you’re going to make your rent or mortgage payments. But before you get too carried away imagining the worst, it’s key to get a handle on your finances and take proactive steps that will help you weather this period of unemployment.
Figure Out How Much Your Employer Owes You
Oftentimes when companies lay you off, they provide you with a severance package, a few weeks pay, and any accrued vacation pay that you have. Try to find out as soon as possible how much they owe you so that you have a better idea of how much money you’ll have to tide you over until you get another position. Depending on how long you worked for the company, you could get a significant amount of money in severance.
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Check Your Emergency Fund
Not everyone has an emergency fund, but if you do, now is a good time to have a look at it to see how much money is currently in it and calculate how long you think it will last. If there’s not a significant amount available, then you can look at other funds or assets that you have that you could potentially tap into if you’re unemployed for a long time. Sit down with your financial advisor or go to the bank to find out how you might move some money around in order to help pay for your expenses until you find another job.
Apply For Unemployment
If you’re eligible for unemployment, now is the time to apply. It can take a while for your application to be processed, so the sooner you get it going the faster you’ll be able to start getting your checks. Calculate how much you expect to receive and add that to your severance package and your emergency fund to determine how long you can support yourself.
Cut Your Budget
Now that you know how much money you will have while you’re unemployed, it’s time to cut back your budget. Since you don’t know how long it will take you to find another position, it’s prudent to slash your expenses as much as possible. For example, you might consider cancelling your cable and scaling back to a different cell phone plan. You should also consider cutting your grocery budget and buying nutritional but cheaper alternatives to your normal staples. Look at all the areas that you can cut back and pare down to just necessities.
Decide What To Do About Health Insurance
If your work provided your health insurance and you don’t have a spouse who has coverage, then you’ll want to look at what your options are to either keep your plan until you get another position or buy a different plan. Thanks to COBRA continuation health coverage, most employers must allow you to continue your health coverage temporarily until you get a new job. Unfortunately, it will likely be much more expensive since you will have to pay whatever your employer used to pay for your health coverage. Depending on your relative health, you might choose a plan with a lower monthly rate but a higher deductible.
Tell Your Student Loan Servicer
If you have student loans, one of the most important things to do is to contact your student loan servicers and apply for student loan deferral. Student loans generally allow you a temporary reprieve from making payments when you’re unemployed. Just remember that the interest on your student loans will continue to accumulate and add to the principal balance of your student loans while they are in deferral. Depending on how much money you have in your emergency fund, you might decide to continue paying just the interest on your student loans while you’re unemployed so that they don’t grow considerably.
Start Looking For Another Job Immediately
The best thing that you can do to help yourself financially is to start looking for a new job immediately. Update your resume, mention that you’re looking for work on your social networks, and start networking.
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