What to Do When You Get Laid Off

“I just got laid off. What do I do next?”

It’s an increasingly common inquiry, and one that can strike fear into anyone’s heart. When you’ve been laid off from work, what should you do? Whether anticipated or not, a personal crisis like the loss of regular income and a steady routine can be a big blow to your budget, not to mention your mental health. If you’ve lost your job, your first instinct might be to panic, but that won’t help. 

Instead, when you’ve been laid off, know what to do next and channel your frustration or anxiety into quick action. These tips for what to do after being laid off from work can help you get back on solid financial footing — and preserve your drive and confidence in the process.

Cut Your Spending

Everyone’s situation is different, whether you’re single or are contributing to a family budget. Maybe your layoff package includes severance pay to cover you for a while, or maybe you’re left without a layoff package and only a short time to figure out how to make ends meet. Whatever the scenario, go through your bills and cut unnecessary spending. If you’ve been ordering takeout or indulging in expensive gaming platforms, it may be time to change your habits. If you have a cable bill, cut services until you retain reliable income. Be honest with yourself about needs and wants so you can adequately trim excess expenses.

Create a New Budget

Make a new budget of the bills and living expenses you must maintain until the next time you’re hired. Take a close look at your emergency fund and how far it will stretch on this new budget. That will give you the best picture of your financial health and make it clear if you need to cut further or find alternative solutions during your unemployment period. Yes, this process can be scary. But digging into your accounts and budgeting immediately will save you surprises down the road. It will also help you figure out if you need to borrow money or seek temporary employment before finding your next dream position.

Evaluate Job-Related Finances

Don’t forget — just because your employment ends doesn’t necessarily mean that all of your benefits do. You may still have important benefits tied to your former employer. Certain employers and labor unions have benefit plans that give laid-off employees supplemental unemployment compensation, so be sure to look into those. An employment contract or collective bargaining agreement including a severance package may tide you over for some time.

This is also the time to evaluate your retirement benefits. If you were regularly contributing to your former employer’s 401(k) or other retirement plan, you might want to keep your money in that plan. Another possibility is rolling over your 401(k) into an individual retirement account (IRA). Pension plans have different rules about distribution, such as the age you need to reach to qualify and how much time has passed since you left the company. Contact your pension plan administrator about the rules of your pension distribution. Also, make sure you have a copy of the summary plan description, which describes your benefits and how they’re calculated, from your employer or pension plan administrator.

Look Into Health Insurance Coverage

Although you have lost your job, you may have the right to continued health benefits for a period of time as you search for a new position. COBRA may allow you to buy temporary extended healthcare benefits through your former employer. There are other options, too, such as a spouse or partner’s health insurance plan or a governmental program that may provide health insurance at a more affordable price point.

Apply for Unemployment Benefits and Consider Private Insurance

You may be eligible for state unemployment benefits, which replace a portion of your income provided you are searching for a job. If your former employer’s human resources department didn’t provide the information, ask your local unemployment office to see if you qualify, as you can receive at least 26 weeks of benefits and may even be eligible for more. If you’re planning ahead, there’s also job loss insurance, or supplemental unemployment insurance, which dispenses income after a layoff. This private insurance requires monthly payments for premiums. Another form of short-term aid is payment protection insurance, which covers loan, mortgage, car and credit card payments if you’re in financial need because of unemployment or temporary disability.

Take Stock of Your Career

Unemployment can be frightening and disorienting. But it’s also an opportunity to reflect. Use this period to think about your previous job. Were you happy, fulfilled or satisfied in your previous job? Did you learn information that redirected your attention? Have your interests and goals changed? You might be tempted to immediately send out your resume in your current field. But if you weren’t enjoying your work, or have concerns about the success of the industry you were working it, maybe it’s time to try a career change — or even branch out on your own.

Retool Your Resume

Once you decide on your career path, the next step is to update your resume. Your career goals help determine what route to take with your resume. If you were at your most recent job for a while, chances are the document you used to land it is a bit outdated. You may wish to highlight specific parts of your experience, or certifications and knowledge that you gained on the job, in order to give you an advantage as you search for the next position. Do some research on resumes in your target industry and revamp yours accordingly. Make sure it’s cleanly formatted, with no spelling or grammar errors, and spotlights the information that will position you best in the eyes of future employers.

Make a Plan for the Future

Once you perfect your resume, start getting it into the hands of potential employers. Or, if you’re planning to go back to school or start your own business, move forward with those pursuits. Whichever route you’re aiming to take, make a plan and execute it. After a job loss or layoff, your days are unexpectedly free, and it can be easy to fall into a slump. It’s OK to take some time to spend with family or do something you enjoy, but don’t wait too long to tackle your next steps. Focusing on your plan of action will motivate and energize you, while also boosting your self-confidence. 

Talk About It

Don’t forget to talk about the layoff or job loss with close friends or family members. Your mental health is important, and knowing you’re not alone can help tremendously as you gather motivation and confidence. Others who have gone through this situation may be able to provide layoff advice. If you’re experiencing anxiety or depression, talk to a professional who can help.

Plan for a Comeback

Figuring out what to do when you get laid off can be stressful, but coming up with a plan is the first step to getting back on your feet. Your Farm Bureau agent is here to help. Contact your agent today.