Even if you’re glad it happened, a job loss can wallop you both financially and emotionally.
It can be easy to lose your stability during this often-traumatic life transition — although it doesn’t have to be that way.
Consider these tips for staying on track and safeguarding your financial well-being and sanity during your time off.
1. Try not to panic. It’s natural and normal to experience a period of grieving after losing a job. But don’t let yourself dwell on one worst-case scenario after another. Instead, recognize that you’re going to survive this, and focus your mind on productive solutions.
2. Remain clear about what you bring to the table. Negative thinking and speaking can hurt your job search. For instance, if you’re an older worker, are you viewing yourself as experienced and knowledgeable, or just old? Most employers want to hire energetic, upbeat people. Rather than giving off an air of desperation on job interviews, be confident about ways you can help the employer succeed. That way your overall message will be, “Here’s how I’m able to help you” — not, “Do you want me? Please?”
3. Be open to new kinds of work. If you’ve lost your job as a white-collar worker, you can harm your chances of finding employment if you’re only willing to seek out the exact same type of work or the exact same pay. Consider working for smaller companies, and don’t view service-sector or blue-collar work as beneath you — especially if money is very tight. After all, no job has to last forever.
4. Live within your means. Be careful not to spend money you don’t have on things you don’t truly need. Now is the time to focus on food, shelter — and your job search. Monitor your expenses for a few weeks or a month so you can see where you can realistically cut back. Don’t eliminate all forms of recreation from your life during this period, though; you need such outlets to maintain perspective and a positive outlook. View it as a challenge to find fun things to do for little dough, such as low-priced matinee movies, great happy-hour or early-bird specials, or free walks, hikes and bike rides in places you love.
5. Visit the unemployment office. You may feel reluctant to collect unemployment benefits, but you are entitled to get help through this form of insurance. Would you turn down medical benefits you had coming your way? Probably not. In like manner, don’t turn down this form of help when you really need it. Also, be sure to make the most of any and all severance benefits you can possibly receive.
6. Use credit cards with great caution. Especially during a period of unemployment, a credit card can keep you in denial about your true financial situation. Accumulating debt will only add to your stress — and you don’t need any more stress right now. In fact, this is an excellent time to contact all of your creditors and talk with them about coming up with temporarily reduced payment plans until you find another job. Many lenders are likely to cooperate because missed payments aren’t good for anyone involved.
7. Look into a home equity line of credit. If you own a home and you can see that a job loss is looming on the horizon, consider opening a home-equity line of credit and keeping it open. This line of credit is something you would want to tap into only as a last resort, but it can give you real peace of mind to know the money’s there if you absolutely need it while you’re between jobs. The interest rates on such lines of credit are often lower than the rates on many credit cards — and of course, if you never borrow any of the money, you’ll never have to pay any interest. Some lenders — but not all — charge an annual maintenance fee in the $75 to $100 range for keeping a line of credit open, but that can be worth it for the peace-of-mind factor. (Big cautionary note: Failure to repay a home equity line of credit could cause you to lose your home, so definitely educate yourself about this form of borrowing before you proceed. The Federal Reserve Board source at the end of this column can help.)
8. Talk about money with your partner. Even when things are going well, it’s common for one partner to be completely unaware that the other partner has different financial priorities and goals. A job loss can put the spotlight on such differences and lead to terrible fights. To avoid this, talk honestly and set goals together about how to cope in the coming weeks and months.
9. Maintain your self-esteem. Remember that all sorts of workers lose their jobs all the time for all sorts of reasons — and many of those reasons are utterly beyond their control. If you did make some mistakes in your last job, go ahead and learn from them – but don’t stay stuck in the past, and don’t beat yourself up unnecessarily. Instead, build yourself up by focusing on your many strengths and past successes. Your time out of a job is also a fantastic opportunity to begin exercising — a step that will benefit your frame of mind tremendously.
10. Realize the potential of your situation. This is an ideal time to reflect on your past employment choices and set new goals that may be better and healthier for you. You could even consider turning what you do for a living into your own business so you can be your own boss. Before you know it, you may be thanking your former employer for letting you go.