In the United States, the unemployment rate was 5.9% in June 2021, according to the U.S. Bureau of Labor Statistics (BLS). Although this statistic represents a decline from the spring of 2020, when the COVID-19 pandemic first hit, it still means that millions of Americans are without work.
If you are one of those millions, you may be facing shock, grief, and anger, in addition to stress and anxiety, especially if you lost your job unexpectedly. However, we have some tips to help you navigate the next steps after losing your job suddenly.
Get Your Finances in Order
While there are emotional impacts from losing your job, the financial effects can cause the greatest anxiety. In fact, losing unexpected income can be a significant blow to your emotional health, so you will feel better if you can get your finances in order as soon as possible. Here are five important steps to take.
Apply for Unemployment Benefits
You should apply for unemployment benefits as soon as possible. Financial attorney Leslie Tayne, founder and managing attorney at Tayne Law Group, said in an email to The Balance: “It’s crucial to apply for unemployment benefits immediately during the pandemic, even if you’re unsure whether you’ll typically qualify.”
Review Your Health Insurance Options
You should also determine whether your former employer will continue to pay for your health insurance for a certain period. “Ask your manager or human resources representative at your company to confirm, as this can vary depending on the company and policy, etc.,” Tayne said.
Transfer Your Retirement Funds
When you lose your job, you typically need to choose one of three options for handling your retirement funds. “If you plan to return to work as soon as possible, you may consider leaving your retirement funds as they are and then rolling them into your new company’s plan once you become eligible,” Tayne said. “Although you won’t be contributing anything during this time, you can keep your money for now.”
Cut Expenses
Your degree of expense cutting may determine how long your money lasts during a period between jobs, so leave no stone unturned. Andrea Woroch, a family finance and budgeting expert in California, suggests negotiating and reducing your bills and using free services. “Contact your service providers and ask how they can help you lower your bill without changing your services,” Woroch told The Balance.
Use Emergency Funds Sparingly
You should access your emergency fund as a last resort. “This should be done with extreme caution and as little as possible,” Tayne said. Before taking this step, contact your creditors to arrange for deferred or reduced payments for a few months. “If you access your emergency fund, it will cover the initial cash need to cover your essential expenses, but you should have a long-term plan to replace the money you take, so it doesn’t run out,” Tayne said.
Transition to Job Searching
Once you have taken the emergency steps to cover your monthly payments and stabilize your finances, it’s time to start looking for a new job. You are competing with many people who may have lost their jobs as well, so you want to stand out. “To impress hiring managers, applicants should focus on their technical skills and soft skills, such as teamwork, communication, and a commitment to excellence,” advised Sheila Murphy, CEO of Focus Forward Consulting, which provides career and business development services.
Allocate
Messages and Resumes
Avoid creating generic template letters and resumes. “After researching the company, you need to focus on how these skills will benefit the company – do this in your cover letter and interview responses,” Murphy said.
Clean Up Your Online Presence
It’s also good to clean up your online presence – and ensure that if you are active on social media, it’s in a constructive way. “The things you post and the comments you make about important topics related to your industry can give the hiring manager a glimpse into your personality that goes far beyond what a resume can show,” Mavi said. “A smart and helpful comment you post on platforms like LinkedIn can create excitement about you as a candidate.”
Use Your Networks
Murphy also said that most people find new jobs through their networks, not through online ads or recruitment agencies. Additionally, she noted that you are more likely to get an interview if a current employee refers your resume.
Utilize Social Networking
Depending on how much money you have in your emergency fund, you may need some temporary work until you land the right job. “If you need to stay financially afloat, then temp work or part-time work is definitely an option to consider,” Mavi said. “You never know who you will meet in the process, and there’s always a chance it could lead to a full-time job.”
Key Takeaways
If you suddenly lose your job, quickly cutting expenses is crucial to how long your money lasts. Don’t let your health insurance lapse or you may face costly medical bills. In a job market crowded with applicants, you can stand out by tailoring your responses and practicing your answers. Having a type of social presence on social media can impress employers. Losing your job may ultimately lead to a new and better position.
Source: https://www.thebalancemoney.com/what-to-do-if-you-suddenly-lose-your-job-5092621
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