Unfortunately, it doesn’t always go as planned. Layoffs are bound to occur when the economy turns sour and your company goes through some tough financial times. Regardless of the reason, being fired is never easy. It can be even more complicated when you don’t have a backup plan waiting in the wings to get you through those stressful first few weeks after losing your job. In fact, there are quite a few positive things that can come from the loss of a job other than needing time to grieve and get yourself back on your feet financially again. Keep reading for eight things you can do when you lose your job…
1. Don’t panic
The most common mistake made by those who lose their jobs is panicking. While it might feel like the worst thing that could happen to you, the reality is that unfortunate things happen people everyday. You’re not the only one struggling to make ends meet. So, try to remember that. It might be hard to do when you’re in the middle of the situation and freaking out, but try to take a deep breath and remember that everything is going to be okay. You have to know and believe that you will make it through this situation.
2. Establish a routine
When you lose your job, you might be tempted to binge-watch Netflix for days on end. Resist this urge. Resist the urge to curl up in bed and check your phone for hours on end. Resist the urge to eat foods you usually don’t eat. Resist the urge to buy things you don’t need. Resist the urge to go out with friends or drink yourself into a stupor. Resist the urge to borrow money. Resist the urge to do any of these things because they’re not going to help you in any way. Instead of wasting time by doing things you don’t need to be doing, establish a routine that helps you get through each day. Make a list of daily activities that you need to complete to help you reach your goal.
3. Reduce excess spending and create a budget
There’s no need to blow money when you don’t have a paycheck coming in. Try to reduce your spending. If you’ve been living paycheck to paycheck over the past few months, this might not be as easy as it sounds. Pay off as many debts as possible. Look into the possibility of consolidating your debt (a different way of saying you’re paying off the minimum balance on your credit cards). Create a strict budget and stick to it.
4. Apply for federal or state unemployment benefits
To collect unemployment benefits, you must be out of work through no fault of your own. Workers who are laid off for economic reasons—due to a plant closing, a reduction-in-force (RIF), or because of lack of work, for example—are eligible for unemployment benefits. State law determines whether a fired employee can collect unemployment. Generally speaking, an employ ee who is fired for serious misconduct is ineligible for benefits, either entirely or for a certain period of time (often called a “disqualification period”). But the definition of misconduct varies from state to state.
5. Decide what to do with your retirement plan
If you’ve been let go or laid off, or even if you’re worried about it, you might be wondering what to do with your 401k after leaving your job.
The good news is that your 401k money is yours, and you can take it with you when you leave your old employer. Whether that means rolling it over into an IRA or a new employer’s 401k plan, cashing it out to help cover immediate expenses, or simply leaving it in your old employer’s 401k while you look into your options, your money isn’t going anywhere.
6. Explore health insurance options
Getting fired often comes as a shock that leaves your head spinning. Once the dust settles, questions will rise to the surface. A common one is, “What happens to my health benefits now that I have been fired?” COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal program that allows employees to keep employer-based insurance coverage for themselves and dependents for up to 18 months (and in some cases, longer). If you were insured as a part-time employee, you’re also entitled to COBRA. There are some important things to know:
- COBRA only applies to private-sector companies with at least 20 employees, or to state and local government employers. The downside of COBRA coverage is that it’s more expensive because (former) employers no longer cover any of the costs. The upside is that you’re still covered under a group plan, which costs less than an individual policy.
- Within two weeks of termination you should receive an “election” notice from the insurance provider, and then have 60 days to decide on whether to continue coverage. You’ll be required to make an initial premium payment within 45 days. You’re out of luck if you don’t pay your premium on time — your COBRA coverage will be automatically canceled.
- The coverage is retroactive, so if you happen to get injured or sick before COBRA kicks in, you’re still covered. As long as your spouse and dependents were covered when you were employed, they can continue receiving benefits through your employer’s plan, even if you elect not to take advantage of COBRA.
- You’re not locked in — you can cancel at any time within 18 months. If you get hired by another company that offers health coverage, you can drop COBRA. The in’s and out’s of COBRA can be confusing. The Employee Benefits Security Administration’s website spells out all of the details.
7. Start a Side Hustle
If you’ve been unemployed long enough that you don’t have savings or a retirement account to fall back on, consider starting a side hustle. You could sell things on eBay, offer babysitting or pet-sitting services, or look into a number of other side hustles that you could try out. Whatever it is, you need to find something else to do to help make ends meet while you’re out of work. It may not be as exciting as the job you had, but it will be a lot better than doing nothing.
8. Develop a job search strategy
The first step is owning it. Take some time for self-reflection, and map out what you want in life. Use this period of professional dormancy to evaluate what’s most important, dust yourself off, and get back on your feet. Ask yourself, “Why didn’t that job work out?” Whatever the answer, make sure it’s good, as hiring managers will want to know. In interviews, be professional, and don’t bash your previous employer, even if it’s warranted. Showcase what you learned from the experience, take responsibility, and be gracious. In doing so, you will effectively have taken control of the situation and used it to your advantage.
This may be the first time you’ve been fired. It might be the first time you’ve been unemployed. It might be the first time you’ve ever needed help. If so, now is the time to reach out and ask for help. You’ll be surprised at how many places will help you in your time of need. Stay positive and think about the things you will do when you get back on your feet again. This is a difficult time, but it is also something that will pass.