Have you ever suddenly lost your job? In the recent economy, many people have found themselves robbed of life-long careers, and still a long way from retirement. This situation can leave you confused, depressed, worried about your finances, and uncertain of what to do.
First of all, don’t panic. This is easier if you’ve been setting aside a part of your income as an emergency fund for just such situations. Ideally, you should have at least one month’s worth of your basic expenses (house payment, car payment, utilities, other bills, and groceries) set aside in a format that’s not easy for you to dip in to. A ‘rainy day’ fund is not the same as an emergency fund. That being said, what if you don’t already have an emergency fund, or haven’t been able to save much yet? There are still things you can do to make ends meet until you find a new job without maxing out your credit cards. Sit tight and don’t make any rash decisions — the mental state you’re in after losing a job isn’t ideal for making important choices that can haunt you for years to come.
Focus on your immediate financial concerns. Where are you at? Are you set financially for a little while, or do you need to quickly come up with some money? It might take crunching some numbers (don’t be afraid to ask for help!), but the first step is to determine how much of a shortage you’ll have over the next few months so you can formulate a plan for making up the difference. Keep in mind that while you may qualify for unemployment compensation, it can take up to a month to process, and will only be a fraction of your former salary. Knowing you’ll be okay for a few months (with our without unemployment insurance) will free your mind to focus on your plan for putting yourself back on the job market, starting a new career, or going back to college.
Solve your need for quick cash. If you determine you’ll need more than you have to cover your basic needs over the next few months, find ways to cut back on your expenses or liquidate some assets. One quick way to do this is to cut subscriptions, monthly clubs, satellite television, Netflix, or other unnecessary expenses. Contact your cell phone provider and see if they can cut down your plan for a few months, but keep in mind you might be using it more for job hunting. All of these changes are temporary and usually involve few if any penalties, but can quickly free up the cash you need to cover more necessarily bills and expenses while you’re out of work.
Think about items you can sell quickly that you won’t regret missing lately, such as items you were already planning to get rid of. One big check from selling something could be enough to hold you over for a while.
Put yourself out there right away, but consider your new path carefully. If you’ve learned anything about how to land a job, you know the importance of updating your resume, utilizing social networking, getting in touch with old colleagues and mentors, handing out business cards, and following up on job leads. While all of these are important, it’s also a good time to stop and think. Instead of rushing into another dead-end job with the same threat of loss, consider the job market. Is it time to change careers? You might not even need to go back to college, but simply change the focus of your skills. You might discover you want to do something new, and losing your job, although devastating, creates an opportunity you might not have otherwise pursued.
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