There are few things in life that can make your heart plummet to your gut quicker than sudden job loss. One day you’re trucking along, making all kinds of financial plans, and the next day everything grinds to a halt. And if you were struggling financially to begin with, then this halt in pay can be terrifying.
The worst part is, no matter the reason for the job loss, it’s nearly impossible to not feel like a failure when it happens.
If you’ve recently lost your job, don’t let the feeling of failure overcome you. Sudden job loss happens to everyone. In fact, you’d be hard-pressed to find an adult who hasn’t been through it at least once in their lives. (I know I have!)
Those who get through this are the ones who take the bull by the horns and act fast. So before any negative feelings get you down, make a plan so you can get back and at ‘em in no time. Here’s how:
1. See if You Qualify for Unemployment
The first thing you should do is find out if you qualify for unemployment. While unemployment won’t fully cover your previous income, it will at least give you something while you search for a new job. The U.S. Department of Labor is a great place to start, so follow these steps to find out if you qualify and how to file a claim:
3) Click on your state and then find the link that tells you how to file a “UI” claim.
Once you file for unemployment, remain mindful of the requirements you’ll need to fulfill in order to receive and continue receiving unemployment. For example, you may need to show proof of having applied for a certain amount of jobs per week. Be diligent about this process or you could lose this aid.
2. Immediately Assess Your Budget
With or without unemployment, now is going to be a very important time to review your budget. Don’t delay. There may be immediate reductions and cut-backs you can make to trim down your budget while you search for a new job.
For example, if you were going out to lunch every day, eat at home every day until you find a job. That alone could save you hundreds of dollars in the first month! Other ideas are to temporarily cancel your cable or downgrade your cell phone plan. (Bonus: many cable companies offer limited time introductory offers, so you could end up with a cheaper bill if you sign back up later.)
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3. Talk to Your Lenders
If you are now unemployed with debt, then you should immediately call your lenders. Believe it or not, lenders of all types offer hardship programs to help if you become unemployed or otherwise fall onto hard times. Here’s a breakdown of information per type of debt:
Student Loan Debt
If you have federal student loan debt, you can apply for deferment or forbearance. This will allow you to temporarily suspend your payments while you get back on your feet. If you’re still struggling when you become employed again, consider the Income Based Repayment Program. The IBR will not help you pay your debt off faster, but it will allow you to pay based only on your income to keep your payments low. If you have private student loans, call your student loan servicer and ask if they have a hardship program.
Credit Card Debt
If you don’t think you can make your credit card payments while you’re unemployed, there are two things you can do to ask for to help:
1) Ask for a reduction in interest rate. If you’re a good customer with solid history and high credit score, then your credit card company may be willing to reduce your interest rate. This will lower your payment and help you pay your debt off faster.
2) Ask about their hardship program. This will not help you pay your debt off faster, but it will give you temporary relief from payments. Keep in mind that these programs do sometimes entail having your account closed and put into a fixed payoff plan.
If you’re struggling to pay your mortgage while unemployed, research The Home Affordable Modification Program and Home Affordable Refinance Program. Qualifications for each of these will depend on a multitude of factors, such as amount of mortgage and income.
Another option is to simply ask your lender for a forbearance. Just like with student loan forbearance, this would allow you to temporarily suspend payments for a fixed amount of time so you can have more room in your budget while you get back on your feet.
4. Research Government Assistance Options
For those who are truly struggling both during times of unemployment and employment, there are many government programs available to help. Here’s how you can see if you’re eligible for assistance:
Help with Food Costs
If you’re struggling with basic food costs, you may be eligible for The Supplemental Nutrition Assistance Plan (SNAP). Eligibility is based on your income and varies per state. Click here to try a pre-screening tool or here for a list of phone numbers you can call per state.
Help with Health Care
Also based on income, you may qualify for health care assistance through Medicaid. Medicaid provides free or low cost health coverage and can be a life saver for people and families who are struggling financially. Healthcare.gov explains more about how Medicaid works, lists a chart to see if you qualify, and shares information on The Children’s Health Insurance Program (CHIP).
Help with Childcare
If you need help paying for childcare, go to the Office of Child Care online to find out what resources are available to you. For an even quicker search, go straight to the state breakdown page and look for childcare services and subsidized child care when you get to your state’s website.
Once you have a job (or if you decide to return to school), there is more help available to you. Google “Child Care Assistance Program (CCAP)” with your state name to find out how to get subsidized child care for while you’re working or in school.
5. Look for Ways to Earn Extra Money While You Search for a New Job
Looking for a new full time job can take a lot more time than you were planning on. Find ways to earn extra income while you search for your next job. The one thing you have now is flexibility in your schedule. Maximize it to keep yourself afloat during your job search!
6. Leave No Stone Unturned When Looking for a New Job
The job market has changed drastically in the past few years – and no one will notice that change more than someone who’s been blissfully unaware while working full time since then. Nowadays, it’s both easier and harder to find a job thanks to the plethora of resources available to help. But the most important thing to do is to leave no stone unturned. Follow these steps:
Step 1: Search for Jobs on the Internet
The quickest way to search job openings is through the internet. And you don’t have to stick to the most popular job search engine sites. For example, you can also find jobs through USA.gov and The American Job Center.
The downfall of an internet search is the sheer number of applicants who’ll also be applying for the same roles. Play the numbers game. Make it your full time job to apply for jobs online. That means you should be doing multiple job applications a day, everyday.
Step 2: Search for Jobs Through Your Network
The next step is to consider your network. That includes family, friends, acquaintances, and colleagues. But when you do this, you’ll want to be careful not to spam them. Never send a general email to everyone in your contact list.
Rather, think carefully about those you know who may be connected to a field or company that makes sense for you specifically. Just like you should do with a cover letter, make each approach to your network (whether it be through email, phone, or in person), one that is perfectly tailored to that person and his or her connections. And if you can do it financially, take that person out to lunch or coffee to talk about it. Showing that you value someone’s time by giving them something small in return will speak volumes to your character – which they’ll relay to their network.
Remember, this isn’t just about asking about job openings. This is about making a connection that could lead to opportunities you may never have thought of. The connection should be about where you want to go in your career and how that person may be able to help you get there.
Protip: Asking for advice is always more effective than asking for a favor in that first meeting. By asking for advice, you’re letting that person connect their own dots on how they might be able to help you – rather than pigeonholing them into a box that may not have an opening just yet.
Step 3: Search for Jobs Through Community Outreach
Expanding your network is vital at this time, so think about outreach going on in your community and find something you can get involved with. People always want to hire someone they know is reliable, hardworking, and has the skills they need for the role. By volunteering in your community, you can exhibit that directly as opposed to just explaining that about yourself in a cover letter. You never know what kind of opportunities community outreach can lead to!
Remember, volunteer events, meetups, professional development seminars, and even happy hours can be great places to meet people who can connect you to your dream job!
Step 4: Follow Up
The most important thing you can do in your job search is to always follow up. Whether it’s for your first internet application, after meeting someone for coffee, or after a formal interview, following up can be the key to sealing the deal for you. Remember, everyone wants their time to be valued. Following up shows you’re dedicated and persistent (as long as you don’t call or email every day or week) and shows that you value the time that person has given you thus far.
7. Keep Track of All Receipts for Next Year’s Taxes
The job search is such an undesirable time for most people that, once employed again, they want to put it in the back of their minds forever. This could be a mistake. Much of the resources you’ll use during the job search (and while training for a new job) could be tax deductible. And since unemployment could cause your yearly finances to take a hit, that break on taxes can help you get ahead in the next year.
So keep track of all receipts that relate to the search. Things like gas and clothing for interviews, materials you purchased for job searching or training, and conference tickets and other networking expenditures could be tax deductible. Keep them all and talk to your tax preparer carefully about this when January rolls around. You just might get the break you so needed after a period of unemployment.
This Too Shall Pass
Being unemployed is hard on the finances and hard on your self-esteem. Just remember that we’ve all been there and you too can get through this! Follow these steps, use the resources available to you, keep your head up, and this could all be a distant memory soon as you pick up for a better and brighter future.
…And for even more advice on what to do next, check out a great post on this same topic by our friend Matt and Mom and Dad Money!
Image Credit: Bruno