“I got laid off.”
Those are some of the hardest words to say, to other people and to yourself.
You might find another job quickly – or you might not. Until you find one, how do you survive financially after you’re laid off from work?
These tips will help you survive the transition.
Identify your financial resources
If your company offers you a severance package, be sure that you understand all the conditions before accepting it. Some severance packages include non-compete clauses so limiting that you wouldn’t be able to work in your field for the specified period of time.
Unemployment benefits vary, depending on the state. Even if you think you aren’t eligible, find out if you can apply for them. It takes time to file a claim and start receiving benefits, so you want to get the process started as soon as possible.
Do you have an emergency fund? Good. Don’t use it until you have to, but count it as part of your financial resources until you find work again.
Credit cards are risky to use when your income is down. Other than for necessities that you pay off every month, use them only in emergencies.
When you organize your expenses by priority, you’ll find that you can eliminate some for now.
You need your home, food, and utilities. That puts your rent or mortgage expenses along with groceries, heat, and electricity bills at the top of the list. You may be able to reduce some of them, though.
If you rent, try to negotiate lower rent for an upcoming lease. Your grocery bill will be lower if you cook rather than buy packaged meals. In addition to lowering your use of utilities, you may find programs in your area that provide reduced rates for those who are struggling financially.
You need transportation to get to a new job once you have one. Will you need to drive, or do you have a good public transportation system in your area? If your car isn’t a necessity and you’re still making payments on it, selling it might make financial sense. On the other hand, if you were commuting to work by car and expect to drive to work again, you can save money on insurance premiums while you’re unemployed. Contact your insurance company to get your insurance coverage adjusted for your current situation.
Your cell phone is a necessity during your job search, but do you need an expensive plan? Consider switching to a less expensive plan, and look for discounts and promotions.
Track all your expenses, and you’ll be surprised at how they add up. That inclusive cable TV package, your gym membership, coffee on the go, and eating out are all lower on the list than the essentials. Cut out what you can – every bit helps. Before you cancel such things as gym memberships, make sure that the cancellation fee doesn’t outweigh the benefits of not paying for it every month.
Manage your debt
Mortgages, student loans, other loans, and credit card debt can be overwhelming when you don’t have a job. The key to managing them is to talk to your creditors before the bills are due.
Your insurance policy may cover your mortgage payments if you’re unemployed. If it doesn’t, your lender may be willing to negotiate a new payment plan. Also look into mortgage assistancemortgage assistance programs.
If you can’t pay some bills, let the providers know about your situation. They might allow you to defer some bills or pay just part of them until you’re working again. Some credit card companies, for example, have hardship programs that let you delay payments or have part of your balance forgiven. Be aware of how enrolling in such plans may affect your credit score, however.
With federal government student loans, two options for delayed repayment are deferments and forbearances . Both permit you to temporarily postpone payments. A key difference is that with deferments, interest doesn’t accrue, while with forbearances, it does.
One of the best things to do for your career, even if you’re not looking for a job immediately, is to look after your online presence.
Basically, this means anything that appears in a Google search your name online. If you’re applying for jobs, almost 80 percent of recruiters search your name online. That means you want to make sure that nothing that would raise a red flag pops up in search.
You can also clean up your social profiles, which are more in your control. You can rebrand these to reflect the direction you want to go with your career, especially on Linkedin, and other career-centric social media sites.
Find temporary work
Taking on freelance work or a part-time job can improve your image to potential employers in your field. It shows that you want to keep working, and you might acquire new skills and experience for your resume. It also eliminates a long gap between your previous full-time job and your next one.
You will need to report any income earned while receiving unemployment benefits. States have different rules on the amount they reduce your benefits by when working while unemployed
Job boards are an excellent source of freelance and part-time work as well as full-time jobs. If you’re having trouble getting traction there, try local job sites. They’re usually faster to respond because of the lower response rate, and they’re more likely to see you. You can also post your resume, making it easier for potential employers to find you.
When your financial resources are running out, look for any combination of freelance, part-time, and full-time work. If you haven’t reached that point, part-time and freelance work leave you with enough time to continue your job search and go to interviews.
With planning and foresight, you can reduce the financial stress of being laid off from work and be better prepared for your next job.
About Guest Author
Susan Ranford is an expert on job market trends, hiring, and business management. She is the Community Outreach Coordinator for New York Jobs. In her blogging and writing, she seeks to shed light on issues related to employment, business, and finance to help others understand different industries and find the right job fit for them.