Surviving a Layoff
Tips and pointers to help you through the days, months and sometimes years after a job loss.
Losing a job is one of life’s most stressful events and staying positive while looking for a new one can be challenging. Constant worry about how you will pay your bills take over your mind; and shame, anger, betrayal and other emotions may even come into play. Still, all is not lost in a job loss. In fact, it may be the opportunity for you and your family to pull together and implement some financial planning. You may even find better paying or more satisfying work – you just need a plan to weather the income dry spell.
Regardless of the time it might take to find another job, it’s important to put a plan in place, just in case.
Here are some financial strategies to help you survive a layoff.
- Budget. Create, re-evaluate and amend your budget. Cut spending to avoid using credit cards to fill in the gaps. Those debts can quickly add up and become unmanageable.
- File unemployment benefits immediately. Find out if you’re eligible. Most workers are eligible if the layoff or job loss was through no fault of their own. Visit www.dol.gov click on “unemployment” for information on benefits and links to your state’s information. If you qualify, be sure to withhold taxes on the money you receive now to avoid a larger than expected tax bill when you file for the year.
- Check your benefits. Find out what kind of severance you may receive from the layoff. You also need to see if you can keep the money you’ve accrued in a company retirement plan, whether your company will offer job placement or resume writing assistance, and whether you have unpaid overtime or vacation pay that you’ve earned. If you aren’t leaving on negative terms, ask your supervisor for a reference letter and some suggestions for your job search.
- Create a plan for your bills. If you believe you will have trouble making your payments, get help quickly to avoid becoming over indebted or filing for bankruptcy. Negotiate with your creditors to work out a lower payment arrangement on a temporary basis. Negotiating with your creditors on your own is possible but can be stressful. You may want to enlist the help of a nonprofit credit counseling agency to work with your creditors on your behalf.
- Stay insured. If you were covered by health insurance, you may be able to continue your coverage under COBRA at your own personal expense. You’ll likely have to pay the entire premium, plus a 2 percent administrative fee. The Affordable Care Act may be a cheaper alternative, as coverage is based on the individual’s income.
- Make contingency plans. While it may be difficult to think about, consider selling assets such as a boat or an extra car if you can’t find a job soon at your old salary. Downsizing to a less expensive home, or tapping into your life insurance policy if possible, are good options to consider if you are struggling to make ends meet. However, before you do, seek professional advice to review your options and to avoid wiping out everything you own.
- Get creatively frugal. Look at each expense and see where you can make changes until you’re back on your feet. Eating out less, for example, may be a good place to start.
- Ask for help. Don’t be shy about seeking help from government and community agencies. Find out what resources are available in your community and take advantage of them.
- Temp it. Temporary work may not be your first choice, but it can help pay the bills. It can even turn into a “real job” after your assignment is over.
Job search strategies
Searching for a job can be stressful and can be a very anxiety producing experience, but there are ways to keep sane during the job hunting process.
- Evaluate your skills. Take some time to reflect and recall the jobs you’ve really enjoyed in the past. Doing so may help you think of new jobs or careers you’d like to try.
- Prepare the paperwork and create or update your resume. Gather your information – work history, job duties and accomplishments and have them handy for all the applications you will likely be filling out.
- Review your credit report. Most employers these days conduct a background check that also includes a review of the employee’s credit report. Check yours in advance to make sure the information contained therein is accurate and up to date. Fix mistakes immediately.
- Seek references from your circle. Personal references are the best way to find a job. Contact everyone you know for ideas and suggestions of potential jobs and employers. Ask if you can use their name when contacting a referral, and don’t forget to thank them afterward.
- Go on a hunt. Look for jobs online, in your local newspaper, and through local employment agencies. Visit the library for books on resume writing and job interviewing. Your local unemployment office/Workforce One also conducts workshops and has resources for jobseekers. Take advantage of these free resources and seminars.
- Protect your identity. Be very careful about providing personal information to a prospective employer over the Internet. Call up the company to verify that the job posting is legitimate.
- Prepare for interviews. Scour the internet and search for tips on what HR professionals are looking for in job seekers. Research the questions they are likely to ask and practice. Ask family members or friends for feedback on what you intend to say and even what you want to wear. Don’t forget to assemble the documents you’ll need, including your driver’s license and Social Security card.
- Consider a career change. If you worked in an industry that is declining or sending jobs overseas, you may want to consider a career change. Before you do however, you may want to work or intern in that new field to make sure it’s something that you want to do.
- Consider starting your own business. If it seems that all is lost you may want to start a business. Bear in mind that it may be very risky, as most new businesses don’t make it through the first two years. So, choose a business with a solid track record and get advice from others with experience. Also make sure it’s an industry you know and that you have the right expertise to be successful.
- Develop a routine. Set a schedule for researching jobs, making phone calls and networking. It may take a while to recover so prepare yourself mentally. Be sure to eat right, exercise and get enough sleep. If you’re experiencing panic attacks, anxiety, or depression, get help from a mental health professional.
- Find the support you need. Keep the communication lines with your spouse open. Joining a support group is a great coping mechanism.
Stay healthy both physically and financially
A layoff, a job loss or even a pay cut can have devastating effects on our personal and financial health. Work is a major part of our identities, and not having a job can be frightening, even traumatic. If you’ve been unemployed for a while and need help sorting out your finances, our certified credit counselors may be able to help. Call Consolidated Credit at or request a free Debt & Budget Analysis online.