Losing a job can be terrifying. If you’ve lost your job, you should take these immediate actions to protect your financial well-being:
Ascertain Your Situation
How long until the well runs dry? Now is the time to make a list of your expenses and see what can be reduced or eliminated. If you are entitled to unemployment, file your claim immediately. Make a new budget now.
Look at your emergency fund and figure out how long you can cover living expenses. No emergency fund? You can count yourself among the majority of Americans who haven’t adequately saved a three- to six-month emergency fund. Your recovery timeline is going to be more urgent.
You might decide to take drastic actions: selling your car, renting elsewhere, sharing your living space, moving in with your parents, etc. Map out your plan of action. Chin up—some decisions will be difficult. But they have to be made.
Avoid Credit Cards Like the Plague
“No worries,” you might be tempted to think, “I’ll just pass this time and live off my credit cards.” Beware! It is extremely easy to overspend—particularly if you’re the type who engages in “retail therapy.” You think life without a job is stressful? Just wait until you taste life without a job with creditors calling you day and night to collect. Avoid this situation by putting your cards aside and putting a payment plan in action for the debt you already have. Get help from a local chapter of the Consumer Credit Counseling Service if you are unable to make your minimum payments.
Execute Job-Seeking and Income-Earning Possibilities Simultaneously
You might not want to work at McDonald’s. Guess what? While you’re busy looking for another job, you should entertain any and all other income-generating possibilities. If you feel a particular job is “beneath” you, you’ll only have your ego to blame when you cannot support yourself or your family.
There are all jobs most of us would prefer not to do; therefore, figure out what kind of work you will do immediately that will provide income. Do this as you search for your next job. Treat this stopgap work seriously because it might be your lifeline for weeks or months.
It might also be the right time to consider seriously starting your own business.
Maintain Your Perspective—Others Have It a Lot Worse
It is easy to get yourself into a “woe-is-me” state. Don’t allow this to happen because employers and others can smell the stench. Keep your perspective because while it might feel, and in fact be, really terrible to lose a job, there are always others who have even greater challenges. A good way to keep this perspective is to volunteer your time to a worthy charitable organization.
Volunteering will keep your mind active. It will also provide a social outlet similar to your previous job. You may be able to make new connections or learn new skills when you volunteer your time. To change our economy, we’ll need to each do our part to strengthen ourselves and do what we can for our communities.
