Five Tips for Dealing With Job Loss

Written by Laura - 13 Comments

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In early 2009, the Bureau of Labor Statistics noted that over 40 states recorded an increase over last year in the number of layoffs. In February alone over 600,000 workers were caught up in layoffs. If you and your family have found yourself in this position, here are some steps to help you cope with this painful change.

1. Don’t panic — assess where you stand

When you lose your job, you should try to remain as calm as you can and see exactly what the situation is. Ask yourself:

How much money do we have in the bank?
How much are our monthly bills?
How much am I receiving for severance?
What do we need to modify in the budget?

2. Update your friends and family about the situation

You may feel embarrassed or ashamed by what happened. Do not let that negative thinking stop you from getting emotional support. Ask your network to please keep their eyes and ears open for any employment opportunities that they might hear about.

You should also ask your family to help you come up with ideas to earn extra money and/or decrease your expenses. Having everyone on the same page will allow you to work through this challenge together as a family.

3. Open your mind to different jobs

You need to cast a wide net, so don’t just look for jobs exactly like your last one. Being too focused on one particular job may decrease your chances of finding work. You might also consider taking on part-time work to keep you from hemorrhaging financially. Until you find a suitable job, working part time can generate income and provide you with a schedule that allows you to go on job interviews.

4. Update your budget

At this point you should try to focus on cutting any nonessential expense from your budget. Living within your means is going to be tougher as you make this transition. Update your budget with the new income amount and see where you can adjust accordingly.

If you can’t pay all your bills, then prioritize where your money goes. First and foremost, your money should go to housing and food. Utilities such as electricity are also important so focus on those next. You should also give priority to medical bills and expenses when updating your budget.

5. Stay away from credit cards

You might be tempted to put your expenses on a credit card until you can find a job. Don’t do it. Credit cards should be a last resort. Instead, see if you qualify for any sort of government assistance to help make ends meet.

This could mean filing for unemployment or applying for state insurance. Remember, this is only temporary — you’ll eventually get out of this predicament. Relying on credit cards can put you in an even deeper hold given the high interest rates and fees associated with them.

Now it’s your turn…

Losing a job can be a very painful experience, especially if you have a family. Remember, you can’t do this alone. Rather, you should seek the help of others when getting back on your feet.

Do you have any tips for dealing with job loss? What’s the most important step?

Published on March 11th, 2009 - 13 Comments
Filed under: Economy, Working
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About the author: Laura is a twenty-something woman working to improve her finances and reduce debt. She writes about personal finance for college students and grads at Green Panda Treehouse.

Comments (scroll down to add your own):

Try not to let yourself get embarrassed. 99% of layoffs are companies forced to let good people go. Use your support group for just that, support. Understanding friends and family will be happy to lend you a hand.

Number 5 is a good tip, don’t use the cards to float you til you find another job. Many people do this thinking they’ll just pay it off when they are employed again. Before you know it you have $5,000 in credit card debt that you don’t want to have to pay now that you are employed.
Comment by the weakonomist — Mar 11th 2009 @ 7:30 am
Great article, but I do believe that “living” within your means is the best advice one can get in trying to cope financially with this recession!.
Comment by Personal Finance Tips — Mar 11th 2009 @ 10:33 am
I just learned my father is getting temporarily laid off, but it could turn to permanent if things don’t turn around for his company. I’ll certainly pass these tips along.
Comment by RB @ recessionsblow — Mar 11th 2009 @ 12:01 pm
I think “3. Open your mind to different jobs” is one of the most important. It is a great time to really evaluate what you could do to earn income and of those things which you would enjoy the most. The thing you enjoy might not provide the highest income at first, but if you do what you love then it might be worth trying to see if you can make it grow.
Comment by Money Progress — Mar 11th 2009 @ 12:36 pm
@weakonomist: I agree! Support from friends and family is critical. It’s a huge adjustment and they can help.

@ Personal Finance Tips: Spending less than you earn is important whether you’re laid off or not. Loss of a source of income makes it that much more difficult.

@RB: I’m so sorry to hear the news. I hope things start looking up for his company. I hope these tips can help him.
Comment by Laura — Mar 11th 2009 @ 12:40 pm
Great advice. I am particularly happy to see that you mentioned insurance. I think it is very important not to let car or health coverage lapse. As unfair as it might be, lightning sometimes strikes twice. That being said, it might make sense to cancel duplicate or non-essential policies.
Comment by Kim @moneymanagement — Mar 11th 2009 @ 1:50 pm
I ran across this website (I have no ties to it at all) that is designed to help laid off workers understand their rights.

http://www.canmybossdothat.com/

I think that is one thing everyone should be aware of is that there may be certain entitlements when it happens. Investigating those and taking advantage of them is important and can help during the transition time.
Comment by BobV — Mar 11th 2009 @ 3:35 pm
I was laid off in December and I actually went through steps 1, 4 and 5 months before I knew I was laid off. I was just doing it to accelerate our debt payoff to get us in a better financial position.

Once I was laid off, it became essential! We were a 2 income household and while I am getting unemployment we are now working towards being able to live off of one income. When I find a job it will be great, but if I don’t it is nice to know we have a plan and we will survive.

I would add to this:
1) Update and expand your network!
2) Update and expand your skills!

Do this now even if you are employed and feel safe in your job.
Comment by Danielle — Mar 11th 2009 @ 6:01 pm
Nice information. The important thing is stay calm and think what the best thing you should do now.
Comment by chuckiesd — Mar 11th 2009 @ 8:21 pm
@ Money Progress: I learned that lessons from personal experience. Having a different isn’t a bad thing, it can lead to knew opportunities.

@ Kim: Thanks! Getting the right insurance coverage is important to protect yourself and if you have a family.

@BobV: What a great site! It’s very helpful. I’m going to tweet about it.

@ Danielle: Sorry about the job loss Danielle.You add wonderful tips and I’m happy that you guys planned ahead. I wish you the best on your job hunt.

@chuckiesd: Thank you!
Comment by Laura — Mar 12th 2009 @ 8:14 am
One thing one of the safe havens right now is to go back to school. Graduate PhD programs often provide a stipend (probably not as high as your old job) and will be an investment for your future.
Comment by JC — Mar 12th 2009 @ 1:41 pm
I have gotten laid off three times, and finally decided to start blogging about it. I worked in high tech during the boom years when everybody got laid off.

The most important thing is for people not to panic – no extremes. Don’t freak out, but don’t take a vacation either.
Comment by Courtney — Mar 14th 2009 @ 2:39 pm
If you’ve already been laid off, then this point won’t matter much. Going along with step 1, “Don’t Panic”, build up your emergency fund. It’s amazing how much great a sense of security that provides and will go a long way in helping you not panic should a layoff occur. Like many other, things are a bit shaky in my industry, but I do rest a lot easier than I would, knowing that I have an emergency fund.
Comment by Michael — Mar 17th 2009 @ 2:06 am

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