How to survive a job loss - Fox 2 News Headlines

How to survive a job loss

Updated:
© iStockphoto.com / Roberto A Sanchez © iStockphoto.com / Roberto A Sanchez


By Andrew Housser

The nation's jobless rate fell to 7.4 percent in July with employers adding about 162,000 jobs, according to the U.S. Labor Department. Still, 3.5 million Americans have been out of work for more than a year. The struggling economy has meant business closures, layoffs and downsizing for many. Plus, in today's market, any employee is at risk for unemployment. If it happens to you, follow these tips to ensure you manage your finances wisely until you find other employment.

1. Stay on good terms with your former employer. You may be surprised, upset or angry that you have lost your job – but it is important to stay on friendly terms with your former company. You may need its help with good references when you apply for new employment. Vent in private, with good friends or through exercise or other healthy outlets.

2. Assess your financial situation. Review your monthly expenses and prioritize your bills. Your top concerns should be mortgage or rent, utilities, food, insurance and medications. Decide what you can cut right now, like eliminating cable TV or reducing your cell phone plan. Take a look at your savings and assets to determine how long you can manage your bills. You may need to consider selling a second car, rental properties or recreational vehicles. Start tracking your spending to see where your money goes every week. At the end of the week and month, review your money outflow and figure out where you can cut back.

3. Take advantage of programs for the unemployed. If you were fired or laid off, you are entitled to a percentage of your former salary while you look for employment. Look into applying for unemployment benefits immediately. If money is too tight, consider applying for food stamps. Contact utility companies to see if they can provide financial assistance if needed. Check with the human resources department at your former employer to see if the company offers placement assistance or job retraining, or if you are entitled to a severance package.

4. Do not overspend during your job search. It's important to look good when job-searching. Still, you can give up your pricey salon for a more reasonable haircut shop. Shop for interview attire at outlet stores and on clearance racks. Network at coffee shops or libraries instead of meeting for lunch. Check with your local public library to see if they offer free resume help or career counseling. In general, think before you spend.

5. Stash the credit cards. Racking up debt will only add to your stress. Instead, contact your creditors about temporarily reducing your payments (if you carry any credit card debt) until you land a new job. Many lenders would rather receive some small payment from you, consistently, instead of none at all.

6. Look into alternative health care options. When cash flow is tight, it can be tempting to forego the expense of medical insurance. But all it takes is one emergency room visit to throw you into major debt. COBRA may allow you to keep your health coverage for a while, but it can be expensive. If you are relatively healthy and do not have a chronic medical condition, you may be better off with a basic medical plan that protects against catastrophic injuries. You can get quotes on affordable health insurance plans at sites such as ehealthinsurance.com or InsureMe.

7. Resist tapping into retirement funds. If you take money out of a retirement fund early, expect to pay a hefty tax, as well as a 10 percent penalty fee. Plus, few people ever repay what they take out. That can affect your financial stability in the future. If you absolutely must tap into additional cash, it may be possible to look into opening a home equity line of credit. The interest rates on these loans are often lower than credit cards. But keep in mind that you can lose your home if you are unable to repay this debt.

8. Get help if you are in too deep with debt. If you were struggling to make minimum payments when you were employed, losing your job is potentially disastrous. If working directly with lenders does not bring any relief, talk with a reputable credit advocacy firm about your options, which might include debt resolution (settlement) or other debt relief possibilities.

It is normal to be upset or even afraid when you lose a job. It takes time to adjust -- the average length of a job search is about seven months. It can take even longer depending upon your geographic location and your field of work. Be patient, and in the meantime, be smart about your finances. It will pay off.

 

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
INFORMATIONAL DISCLAIMER The information contained on or provided through this site is intended for general consumer understanding and education only and is not intended to be and is not a substitute for professional financial or accounting advice. Always seek the advice of your accountant or other qualified personal finance advisor for answers to any related questions you may have. Use of this site and any information contained on or provided through this site is at your own risk and any information contained on or provided through this site is provided on an "as is" basis without any representations or warranties.
Powered by WorldNow

WJBK-TV | Fox 2
16550 West Nine Mile Rd.
Southfield, MI 48075

Main Station: (248) 557-2000
Newsroom: (248) 552-5103

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices