Faced with the sudden loss of income, it’s easy to fall into a tailspin propelled by thoughts of upcoming bills, mortgage payments, and living expenses.
But instead of giving into the panic or letting your circumstances take a toll on your sense of self-worth, take a breath.1 Remember, you’re not the first person to lose job security, and many people before you have successfully pulled themselves out of financial hardship.
Between government assistance, shrewd budgeting, and exploring ways to earn money quickly, there are lots of ways to keep yourself afloat financially. Below, find 5 ways to fund this recovery period until you find yourself on solid footing again.
What To Do After Losing a Job
If you’ve just lost your job, it’s important to be proactive in approaching the coming weeks and months. Facing your situation head-on will make it easier for you to pay your bills and meet your other financial obligations while you look for a new job.
With that, here are the first 3 things that should be on your to-do list to ensure you’re supported after losing your income.
#1 File for Unemployment Insurance
The first thing you should do after a job loss is file for unemployment insurance, regardless of any severance pay you may receive.2
Financial aid and unemployment benefits are distributed by individual states, with oversight from the United States Department of Labor. This means each state has its own eligibility requirements you’ll need to prove to qualify.3
In most states, your eligibility will be dependent upon:
- The reason why you lost your job
- The amount of time you worked at that job
- How much you earned while working there
If approved, you’ll receive weekly benefit payments (by direct deposit, mail, etc.) equivalent to a percentage of your former income. This weekly benefit amount can help you cover daily expenses in the meantime.
#2 Plan an Emergency Budget
Devising an emergency fund budget is essential while living on limited financial resources.4 Even if you receive unemployment benefits, they may not be enough to cover all of your financial obligations (and they won’t last forever).
Now’s the time to trim extra expenses from your budget. Start by determining how much money you will have access to in the coming months. Then, make a list of non-negotiable expenses, which could include:
- Rent and utilities
- Mortgage or rent payments
After establishing your essentials, make a list of expenses you can put on hold for a while. These could include streaming services, subscriptions, or gym memberships.
#3 Let Your Lenders Know
It’s essential to inform any banks or other institutions you owe money to as soon as your job status changes to avoid credit card debt or any other liability. They may be willing to work with you during this period by pausing or deferring payments, or even offering other types of assistance.5
When you lose your job, be sure to reach out to:
- Mortgage lenders
- Credit card companies
- Student loan and other loan financers
How To Pay Your Bills With No Job and No Money
Once you’ve laid the foundation for this unemployment period, you’ll need to figure out a way to stay on top of your other bills. Unemployment benefits and a tighter budget can help, but it’s worth investigating the following three options to help you secure extra coverage.
#4 Tap Your Emergency Funds
If you’ve been putting money aside for a rainy day, it may be time to tap into those emergency savings until you’re earning money again.4 Many people turn to financial resources like:
- Savings accounts
- Retirement funds
- College savings
If your emergency funds are limited, consider telling your friends or family about your circumstances. They may be willing to gift or lend you the necessary funds until you’re on your feet again. If you don’t have any retirement savings, it’s a good idea to learn tips for saving for retirement — it could save you in the future.
#5 Sell Your Assets
It’s not easy to part with your belongings, but ensuring your security and health during this time may be more important than your material possessions.2 So, consider sifting through your belongings, identifying ones you’re willing to part with, and putting them on the market.
In some cases, selling your valuables may even bring in enough money to cover some of your larger expenses. However, every penny counts toward your financial situation, and whether it’s a yard sale or posting on social media, even selling smaller items could mean funding an electric bill or filling your tank for a week or two.
Losing your job is never an easy situation to find yourself in, but it’s rarely the end of the road.
By reducing your needs, being transparent with your support networks, and tapping into the additional resources you do have at your disposal, you can navigate this transitional period and start your next chapter in upright standing.
- The Wall Street Journal. How to Deal With Job Loss Without Damage to Your Self-Esteem. https://www.wsj.com/articles/how-to-deal-with-job-loss-without-damage-to-your-self-esteem-11607118880
- Credit.com. 10 Things To Do If You Lost Your Job and Need Money Now. https://www.credit.com/blog/10-things-to-do-if-you-lost-your-job-and-need-money-now/
- CareerOneStop. Unemployment Benefits Help Page. https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/unemployment-benefits-finder-help.aspx
- Better Money Habits. 11 Money Moves To Make After Job Loss. https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/money-management-after-job-loss