Being laid off is one of the financial setbacks that calls for immediate action. It’s a time for a measured but prudent response.
In this article, we will go over:
When you lose your job, a few things happen.
The effects are normally financial and psychological. You have lost a regular and predictable income stream, as well as a routine that helps ground you.
For these reasons, job loss can be traumatic or even devastating. Uncertainty over the future can make it worse. But regardless of what your other prospects may be, panicking is counterproductive.
More so than in most periods in living memory, if you’ve lost your job recently, you’re far from alone.
The Covid-19 pandemic and its response triggered one of the worst employment crises seen since the Great Depression. This shock came at the tail end of one of the longest employment recovery and growth periods in history, making the relative statistics even more shocking.
A layoff is better than being fired. In some cases, you have a chance of being rehired once the company can afford to take you back on again. In many cases, however, you and your employer both understand that the job is not coming back.
So, being laid off results in:
The purpose of the following steps is to address each of these potential problems, even if they may not necessarily occur. It’s important to be ready regardless.
Let’s break this question down into a few areas, starting with the most immediate problem – money.
Your first actions should be those that ensure that you are able to stave off the worst possible effects of job loss.
Unemployment benefits are not always an option. But if these benefits are a possible option for you, determining what you qualify for is a prudent first step. If the loss of your job was no fault of your own, you should qualify.
Oftentimes, even employees who were fired can qualify for unemployment insurance.
The Fair Labor Standards Act (FLSA) does not require employers to offer severance. But many employers grant severance packages upon the termination of their employees’ employment.
Normally, the qualifications for severance pay are tied to the length of time you’ve worked for the company. If you qualify, your employer should help you understand your severance income for the next few months.
Shortly after seeing to your basic finances, it’s important to ensure you are covered by healthcare insurance.
In many cases, you will still be eligible for coverage under your employer for some time after being laid off. Talk to the HR department to see if this is possible for you. Bring up options such as COBRA.
If your company will not cover your insurance, check out Healthcare.gov for alternative options.
This really should be number one, but immediate income concerns are equally important.
Now that you’ve dealt with the former, it’s time to account for your new financial situation. Setting a new budget is the only way to adapt to your new circumstances without making huge mistakes such as multiplying your debt.
Your new budget will likely be uncomfortable, but the purpose is to save you from greater discomfort and financial hardship. So, cutting unnecessary expenses and then controlling the things you must spend money on can help you recover.
It’s time to think about new career goals. This is for the sake of long-term stability, but it’s also important for:
You can see this as a new opportunity. You can now account for the factors that may have led to your layoff, or learn new skills.
Side gigs such as freelance positions or weekend jobs help your financial and mental health at once. You’re unlikely to lose them as easily, as they aren’t full-time jobs.
Side hustles can help you occupy some of your time and cushion you from some of the budgetary stress you are facing. If you don’t have one, now is a good time to learn new skills or turn existing skills into a source of freelance or part-time income.
While you’re at it, now is also the best time for a CV makeover!
We’ve touched on these issues before, because they are so common.
There are well-understood symptoms of depression that can pop up following job loss. In the more extreme form (major depressive disorder), these symptoms include:
If these issues are not present before your layoff, they may be a direct result of the mental trauma associated with it.
Try to recognize these symptoms as what they are; a temporary and reversible condition. If that does not work, contact a mental health professional.
Shame stops some people from sharing news of a recent layoff.
But this forces them to suffer the financial and mental health consequences alone. If there’s anyone who can help console you of either of these troubles, it’s worth it to talk to them. Layoffs are terribly unpleasant, but they are regular and normal events that happen to millions of people.
There are some important mistakes to avoid following a layoff.
Avoiding these reactions can help you avoid the worst potential consequences of job loss:
Being laid off can cause many problems, starting with immediate budgetary concerns.
But it’s crucial to stay cool-headed, deliberate, and logical in your response. Financial prudence is the first step. But it’s also important to not ignore the emotional toll lay offs can take on you.
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