Losing your job is a major life change and there are likely a million things and what if’s going through your head right now. The goal of this post is to help you to consider which things are priorities for you and your situation and to be more organized in the chaos that understandably ensues when you lose your job. (I am located in California, so please note that certain laws and procedures may be different in your state.)
1. Use Your Health/Dental/Vision Benefits and Figure Out New/Temporary Insurance
- First, you want to figure out your current health/dental/vision benefits. If you had these benefits through your employer, those benefits will likely be expiring soon unless you elect to continue them at a potentially increased rate (for example COBRA). Every plan is different, but usually benefits will expire on the last day of the month that you were employed. This is good news if you become unemployed at the beginning of the month, and a little more challenging if it’s the end of the month. But you should confirm that this is true for you in case your benefits end right at your termination of employment or longer than the end of the month. You can ask your former employer or you can call your insurance company (or companies). Then if you need or desire to, you can use those benefits while you still have them. Consider using all of the benefits if they are within your budget or completely covered. These benefits may include a yearly physical, dental cleanings, vision check up, mental health benefits, chiropractic adjustments, acupuncture, etc. One of the benefits of being unemployed is that you now have the time to make these phone calls to your insurance company and you can attend appointments within business hours.
- Next, you will want to figure out if you want to get new health insurance while you’re unemployed. You may be able to continue your current health plan, usually at a significant cost, through certain programs like COBRA. A job loss is considered a major life change, so this allows you to seek healthcare coverage outside of the open enrollment period on the healthcare private market or through government programs, if applicable (for example, MediCal). If your income is low enough, you may even temporarily qualify for health insurance at little to no cost to you. Some people may opt to not have health insurance as they search for a new job. I have been in between jobs a couple times and I very rarely go to an allopathic doctor (a typical medical doctor). The first time I was in between jobs I did not get health insurance and the second time I did. I am very glad that I got it the second time, because I ended up needing it. Check out the laws in your state because some states require that you have health insurance or you may get fined on your taxes. In California at the time I’m writing this, if you don’t have coverage 9 out of the 12 months in a calendar year, you can pay a pretty significant fine for not having health coverage when you file taxes for the year.
2. Apply for Jobs and Post Your Resume
It can be tempting to give yourself a mental vacation from work-related things when you lose your job, and you definitely should give yourself permission to do things that you enjoy and have a good balance for your mental health. However, it can sometimes take weeks or even months before companies begin to respond to your job applications. For that reason, I strongly encourage you to put some work in right away and relax more a little later. Update your resume, post your resume on job boards, and apply for jobs. You’ll be able to enjoy relaxation mode even more knowing that you’ve already put some work in.
3. Apply for Unemployment
Here in California, everyone serves a one week period per year after they lose their job that is not paid by unemployment. After that, you certify your unemployment benefits every 2 weeks by answering a few easy questions about your income and job search. Even though you are set to be paid after you have served your 1 week waiting period, in my experience, it can take a bit (about a month) before you receive your first unemployment payment. After you receive your first payment, things go a lot quicker in the future.
4. Figure Out Your 401k Situation
If you were contributing to your company’s 401k account or a similar account, find out from that company what the options are (for example, transferring the money to a new account at your new job, transferring the money to a personal account, cashing out, leaving it with the old employer, etc.). Many companies have a set timeframe for how long you have to do this.
5. Make a Game Plan
Every person’s situation in terms of timeline and finances is going to be different here, but regardless, it’s important to make a game plan to stay aligned with your goals. First, determine your monthly expenses/budget and if there are any areas you can cut or reduce while you are unemployed (see Bonus #1). If you have money set aside for this type of emergency, determine how long you have before you run out (based on your expenses) or dip below a level that you are comfortable with. If you are applying for unemployment, you can factor in the amount you expect to receive here as well. Keep in mind though, that this benefit potentially could not even kick in for around a month.
Once you know how much to expect from unemployment (this is based on a percentage of how much you made in your previous job, but there is a maximum amount despite how much you make), you can also calculate what minimum salary of jobs are worth applying for at this point. Keep in mind that any work you do may disqualify you from or reduce the amount of your unemployment benefits on any given week that you worked. All of this will also depend on your personal philosophy surrounding unemployment. My personal philosophy is that when I had a job, I paid on my taxes every paycheck for this type of situation and now I am cashing in on it for the short term when I need that help. I believe in hard work and that being on unemployment for the long term when you are able to work is not the right thing to do, but for the short term, that’s what it’s there for. I want to use that free time that I now have to look for a job and attend interviews that have a comparable salary to what I had before, rather than occupying my time with a new job that pays little but completely occupies my time and energy that could be spent getting a suitable job. Of course, your philosophy may be different, and that’s okay. And your philosophy may change depending on how long it takes you to get a job, what you can live on, and other factors like that. But here’s an example of what I mean by calculating what salary jobs are worth applying for. Let’s say that you will receive $450 a week in unemployment benefits (that’s currently the maximum in California). So for my time and energy and money, it would make sense to look for jobs that pay more than $450 a week.
Now that you have figured out how long you have to look for a job (based on your budget) and what your time may be worth, you can create goals that are appropriate for your specific situation. Here are some questions to consider based on your savings and unemployment benefits:
- How long before I absolutely need to have a job?
- In terms of both industry and salary, will I cast my net wide or be specific?
- How long will I apply for jobs within my desired salary range and industry, before looking for work below that range? Or at what point will my strategy change?
- Will I get a part time job until I find a full-time job?
- Will I do contract work until I find a full-time job?
- How do I want to allocate my time and energy on a daily and weekly basis in my job search?
- How will I practice and balance self care on a daily and weekly basis while also looking for a job?
6. Keep a Record of Final Checks and Paperwork in a File for Tax Time
When you are dismissed from your job, you will receive your final paycheck and potentially some papers notifying you of your rights or next steps for insurance. Put these in a folder or file that you can access for when you file taxes for this year. I like to have one folder for anything financial for the next tax year and one folder for anything relating to papers given to me about unemployment, changes in insurance, or forms the company gives me. But even just having one folder with everything that you can refer to will help you stay organized.
Those are the 6 things that I have found to be the most helpful to do right away after losing a job. Below are 2 bonus things to help you make the most of your time and money.
Bonus 1: Make the Most of Your Budget
Discounts
Some of the companies you have expenses with may give you a discount based on your income change. For example, here in San Diego, our gas and electricity company may discount your bill based on your income. Now that your income is solely from unemployment, your predicted annual income is most likely going to be significantly less than what it previously was. Consider reaching out to these companies or searching their websites to see if you may qualify for these types of programs.
Cutting Expenses
We all need to pay for our rent/mortgage and food, but are there some optional expenses you want to consider temporarily reducing or removing completely for the time being? Maybe part of your budget was eating out or getting Starbucks daily or going to concerts, but right now that is not feasible. Or maybe it is. It is up to you to decide, but it is something to consider if you want to temporarily reduce your expenses. Again, the answers will be different for everyone, and it’s important to still have balance between your budget and the things that will help you manage stress during this time, but here are some questions you may want to consider:
- Can I reduce my utilities usage (gas, electricity, water)?
- Can I reduce my food budget in any way, such as reducing eating out or not buying luxury items?
- Can I cut or reduce my alcohol budget?
- Can I shop at cheaper or discount stores for groceries and essentials?
- Can I cut or reduce impulse buys?
- Can I pause or eliminate subscription services?
- Can I pause my gym membership?
- Can I pause alternative healthcare services like supplements, massages, chiropractic, acupuncture, etc.?
- Can I drive less and reduce what I am spending on gas?
- Can I buy less expensive gifts for birthdays, anniversaries, weddings, bridal and baby showers, etc.?
- Can I say no to some outings, trips, events, and entertainment?
Bonus 2: Do Things During Business Hours
If you had a 9-5 job, you now have time to do the things on your to-do list or fun list with less traffic and crowds. You can get your car detailed, go to doctors appointments, check out that museum you’ve had your eye on. You could do those kinds of things during the day and apply for jobs on nights and weekends. Figure out what works best for you, but this is definitely one of the biggest perks of being temporarily unemployed.
Best of luck in your job search and I hope that this becomes an opportunity for you to obtain an even better position than your last! Comment below with the tip you found to be most helpful and are going to implement first.