Layoffs (and quitting!) are a part of life. In some cases, a new fiscal year can trigger organizational changes that cause folks to worry about their job security, and in some cases be on the receiving end of cutbacks. It's a topic that's crucial yet often daunting to consider. However, there are practical steps everyone can take to make the most of these changes, and even come out on top.
Processing the Emotional Impact
Losing a job can trigger a fight-or-flight response. It's essential to take time to process this experience. Acknowledging your feelings and giving yourself time to absorb the shock is crucial. Acting out of panic can lead to hasty, possibly detrimental decisions. Remember, it's okay to take a moment to regroup emotionally.
Practical Steps to Take
1. Apply for Unemployment Insurance: It's a common misconception that unemployment benefits are a form of charity. In reality, they're more akin to insurance that you've been contributing to while employed. Filing for unemployment can provide a crucial financial cushion, offering about 60% of your take-home income.
2. Health Insurance Options: If you lose your job, you'll likely need to find new health insurance. COBRA allows you to continue your current plan, but it can be expensive. Alternatively, explore options under the Affordable Care Act.
3. Budgeting and Creating a Runway: Assess your financial situation by determining your cash on hand and monthly expenses. This calculation gives you a 'runway,' or the number of months you can sustain yourself financially without income. Having a clear picture helps mitigate panic and allows for more strategic decision-making.
4. Using Credit Cards Judiciously: While typically we advise against accruing credit card debt, in a pinch, they can be part of your emergency strategy. This is especially true if your cash reserves are not robust enough. The key is to use credit cards judiciously, ensuring you have enough cash for essentials like rent, which often can't be paid with a card.
Embracing the Opportunity
Job loss, while challenging, can also be an opportunity for growth and reflection. It's a rare moment when you're not tied to a strict schedule, offering a chance to consider what you truly want in your next role. As long as your emergency fund is in good shape, this might even be a good time for a well-deserved break or vacation. It's about focusing on your budget, understanding your financial runway, and using this time as an opportunity for personal and professional growth.
If you're facing job uncertainty or have recently lost your job, don't hesitate to reach out. We're here to help you stay money positive through it all.
This article is based on original advice shared in the Money Positive’s video So You Lost Your Job - Don't Panic. It was written in blog format with the help of ChatGPT to expedite publishing on our website.