You’ve Lost Your Job, Now What?

If you have lost your job, you know that losing a job is a major life crisis and may have caught you completely unprepared.

You may be someone who has played by the “rules” your whole career. Studied hard, worked hard, had a great career and future ahead of you, and now through no fault of your own, find yourself suddenly out of a job.

Now what?

What’s next?

What should you do?

As I write this, we are all experiencing the chaos resulting from the global COVID-19 pandemic crisis. The virus is ravaging the economy and by just the first week of April 2020, unemployment claims in the U.S. have skyrocketed to nearly 17 million.

Losing a job can be one of the most devastating losses a person can experience. If you are fearful that you might lose your job or are one of those who has already lost your job and joined the ranks of the unemployed, you may be in shock and are likely feeling anxious.

Feelings of grief after a job loss are completely normal and are common emotional reactions to a loss of any kind.

Your job isn’t just how you make a living. Besides possibly shaking your self-esteem or self-confidence, many people form a professional identity tied to their job, and the involuntary loss of that job feels like a loss of identity.

You may also experience a sense of loss regarding your financial security, your work-related social network, and your daily routine.

Elisabeth Kübler-Ross was a psychiatrist who pioneered the “Five Stages of Grief” theory. While not everyone moves between the stages in the same way, you may find the model helpful to better understand the range of emotions you may be feeling.

• Denial – shock, numbness, unreality of the situation
• Anger – angry at God, the doctors, your employer, the system
• Bargaining – seeking ways to alter the reality (making deals with God, promises to change)
• Depression – expression of mourning and sadness
• Acceptance – adapting to the loss and figuring out how to go forward

You must allow yourself time to grieve and work through your emotions. This is no time to panic and act irrationally or out of fear.

Here are some suggestions.

1. Avoid panic. Remind yourself that you’ve successfully made it through tough times before. Remember, too, that you’re not alone. Others are going through what you’re experiencing right now.  You can focus better and think more clearly when you consciously keep from giving in to panic. Practice deep breathing and meditating. Listen to music that calms you.

2. Catch your breath. Process what happened – the reason(s) you lost your job. Was it a lay-off, a company down-size, or based on your work performance? Gain an understanding of why it happened.  Allowing yourself time to think will help you move forward and leave regrets behind.

3. Give yourself a break. Regardless of the reason, tell yourself that it was somehow destiny that you be “released” from the job. Avoid blaming yourself too harshly. Even if there were something you could have done differently, derive the life lesson and forgive yourself.

4. Get your body moving to reduce your anxiety, depression, and stress. This is a great coping skill because it builds confidence and self-worth by changing your neural pathways in your brain. There are many ways to exercise. Pick an activity that you enjoy.

5. Let go of resentment. It can be difficult to move forward when anger is weighing on your shoulders. You do not have to carry this around anymore. You’re capable of letting go and forgiving.

6. Accept that adversity is a part of life. Sometimes bad things, such as an unexpected job loss, just happen. Accepting the situation is a key step to finding a way through it. Tell yourself that you’ll get through it.

7. Build a support network of family and friends. Ask for and accept help. You’d be willing to help the people in your life, so give them the same opportunity. There’s no reason to struggle alone.

When you are ready, it is time to take action.

Everyone has faced adversity at some point in their life. Cultivating resilience is a practice that will make your road to success smoother and easier, not just in dealing with your current job loss, but all future challenges as well.

Resilience is a skill that can be learned. Life is something that you can either go through, or grow through. Resilience requires the willingness to grow and adapt. Life has peaks and valleys. It is always changing. If you’re able to accept this, you’ll find that you’re more motivated to get curious about the lessons of each moment.

Always remember:

• You have the freedom to choose your reactions. Your emotions and thoughts are not facts that you need to act on.
• You can reframe any situation in order to see it from a positive perspective. Look at the situation in a new way and avoid mind-reading or attempts at predicting the future.

Now apply this to your current employment situation:

1. Begin with the basics. Take care of your body, brain, and environment. Pay attention to the patterns of critical self-talk you play in your head. Replace these negative phrases with positive affirmations.

2. View your situation as a fresh start. Consider that book closed. You’re now beginning a brand new story. Be optimistic. It’s so good for the soul to be able to go down a new path in your journey. Who doesn’t love a “do-over?”

3. See the silver lining. Ponder the idea that any difficulties you had at your former job are gone now. You’re looking at those old challenges in the rearview mirror. Ignite your passion for the future.

4. Follow your dreams. Is there something you’ve always wanted to do with your life? Now may be the chance you’ve needed to take that first step toward establishing the life you really want to live. Put your fears and insecurities behind you. Strengthen your resolve and go for it.

5. Embrace the unknown with grace and enthusiasm. True, the unknown is scary. Sometimes though, it’s exciting and even life-changing. When you approach your jobless situation with optimism and confidence as if it’s a big adventure, you’ll likely experience positive results.

Gaining a clear picture of where you are with your finances since you have lost your job will help you feel more in control. For many, this will be a tough exercise. But it is a necessary one, so don’t put it off.

In fact, one of the biggest mistakes many people make after losing their job is not making immediate adjustments in their finances.

With the uncertainty of the full impact of the COVID-19 pandemic, you could be out of work for four weeks, or four months.

No one knows right now.

But what is certain is that if you were already living paycheck-to-paycheck, there will likely be some impact on your finances.

The first thing you should do is adjust your lifestyle to fit your new financial reality … at least temporarily. Conserve as much cash as you can.

First, determine the resources you have.

• Total cash:
• Savings:
• Amount of available credit:
• Other income:
• Life insurance cash value:
• Mutual funds/other investments:
• Retirement accounts:

Next, make a list of your current expenses (review your checkbook register, credit card statements, and/or online banking profile).

• Mortgage or Rent:
• Property Taxes (if not included in mortgage):
• Homeowners or Renters Insurance:
• Food/Groceries:
• Electricity:
• Heat:
• Water/Sewer:
• Other Utilities:
• Sanitation/Garbage:
• Telephone/Cell Phone:
• Cable TV:
• Streaming Services (Netflix, Hulu, etc.):
• Car Payment(s):
• Gas/Transportation Costs:
• Health Insurance:
• Prescriptions/Other Medical:
• Student Loans:
• Other Loans:
• Credit Cards:
• Child Support:
• Child Care:
• Life Insurance:
• Auto Insurance:
• Magazines/Newspapers:
• Other Memberships:
• Other:
• Other:
• Other:

Be as thorough as you can. This will allow you to more easily see what you can cut out. Determine which of your current monthly expenses must be maintained (mortgage and car payments, utilities, groceries) and which ones you can do without for now.

The sooner you make these adjustments, the better off you will be.

If your unemployment stretches on for a while, you may need to cut back to only making minimum payments on your bills.

While now is not the time to be holding a garage sale, you may find some things that you can sell for cash on Facebook Marketplace, buy/sell/trade groups, or Craigslist. (Be sure to minimize contact with buyers — for example, taking payment by PayPal, Facebook payments, or Venmo and doing porch pickup.)

Prioritize. Life is all about priorities. Now is the time to ruthlessly cut all your unnecessary expenses. Austerity has its time and place, and the time is now.

Look at how much money you have available and then prioritize your bills accordingly. Typically, your mortgage, basic utilities, insurance and food will come first. Credit cards are usually last on the list.

If you will have trouble making your mortgage payment or paying other bills (credit cards, auto loans, student loans), contact your lender.

Many of them have forbearance programs which allow you to make reduced payments or skip payments (adding the missed payments to the end of the loan period).

You may also be eligible for special programs for the unemployed. For example, the “Home Affordable Unemployment Program” may reduce your mortgage payments or suspend them altogether for a period of time.

Your credit card company may reduce your interest rate or lower your required minimum payment due to a job loss. (If you have involuntary unemployment credit card insurance, your credit card company may cover the minimum payment if you are laid off for a specific period of time.

However, charges incurred after the layoff are excluded.) Don’t wait to explore your eligibility for these programs.

Try to avoid tapping into your retirement accounts or selling stocks or mutual funds while the stock market is down.

If you have a cash-value life insurance policy, you might consider tapping it for emergency cash, but remember you will have to pay interest on any loans you take out, and you’ll want to pay the loan back when you are able to.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) eased restrictions for accessing retirement account funds. The new law allows workers who are financially impacted by the Coronavirus pandemic to cash out up to $100,000 of their 401(k) or IRA accounts.

(Affected individuals are people who are diagnosed with COVID-19, their spouse or dependent.

In addition, undiagnosed individuals can take a Coronavirus Related Distribution (CRD) if they suffered adverse financial consequences due to being quarantined, furloughed, laid off, having their hours reduced, or who were unable to work due to child care responsibilities due to the Coronavirus pandemic.)

The law waives the 10 percent early withdrawal penalties (if money is taken out before age 59-1/2) and gives qualifying individuals three years to replace what they took out or to pay the ordinary income taxes due on the distribution.

However, cashing money out of your retirement account is not recommended unless it’s a last resort, as you will be sacrificing long-term growth of this money.

If you are furloughed from your job, you may not have to immediately repay any outstanding 401(k) loans like you would if you lost your job.

(If you leave your job under normal circumstances — whether by choice or if your position ends up being terminated, if you are under 55, unless you repay the loan in full by tax day the following year, that loan becomes a distribution and you will pay a 10 percent early withdrawal penalty plus your ordinary income tax rate on that money.)

Note: If you had a previous loan against your 401(k), the CARES Act legislation does not apply to that loan.

Also, avoid relying on credit. When cash is short, it’s a common practice to start using credit cards to replace a paycheck.

The cost of this money can be incredibly high, and this debt is difficult to eliminate later on. Don’t fall into the trap of viewing credit as a viable solution.

The first question to answer is: Is this unemployment temporary — or permanent? If you’re out of work due to the Coronavirus pandemic, your employer may have furloughed you temporarily.

If that’s the case, your efforts will be focused on getting through this temporary period of unemployment.

If, however, your employer has permanently closed, or if you’re looking to change jobs or change careers, you’ll have different actions to focus on.

You may also take this opportunity to change directions with your career.

Because the provisions under the CARES Act do not require those receiving unemployment benefits to be actively seeking work, you could use this time to start a new business.

In 2012, the Middle Class Tax Relief and Job Act authorized $35 million in funds to encourage states to enhance and promote Self-Employment Assistance (SEA) programs.

SEA entitles unemployed individuals to claim jobless benefits while simultaneously gaining access to small business development assistance.

An individual with a “viable” business plan can continue to receive unemployment benefits as long as they are working full-time to get a new company off the ground.

Under this program, individuals receive financial aid equal to their unemployment insurance benefits for a maximum of 26 weeks while they receive entrepreneurial training and other resources (including counseling and technical assistance) to help them launch a business.

However, note that you are not eligible to receive extended unemployment benefits if you participate in the SEA program — you are limited to 26 weeks of payments, and you may not be eligible to receive the additional $600/week in federal assistance.

Check with your state’s Department of Labor to see if they offer a SEA program. (As of March 2020, the states of Delaware, Mississippi, New Hampshire, New York and Oregon have active Self-Employment Assistance programs.)

Take advantage of the programs available to you. Many of these are paid for through state and federal funds.

This isn’t charity.

These are programs paid by tax dollars, and the goal is to get you back working again.

Without a job to go to every day, your days may seem endless.

(Unless you have children at home that you’re suddenly in charge of teaching.)

Work on projects that you’ve put off because you’ve been busy with work.

Read the book you’ve been meaning to read.

Enjoy hobbies you haven’t had time for.

But don’t lose career momentum.

Not every industry slows in an economic downturn. Some may even grow; if you work in social work your skills are in great demand right now.

Other examples include science and research, data analytics, and communications.

These are fields in which you are likely to see an uptick in opportunities as well.

If you work in one of these fields, you may find yourself with a new job quickly.

But even if these are not your targets, remember that hiring will never come to a complete stop.

And when we hit the recovery, you want to be the person on the top of that list. Taking consistent action now will ensure that you are.

In stressful times like these, it’s easy to succumb to your anxiety and not take action but understand that this will only make your challenges greater in the future.

Take a deep breath and do everything you can to create some momentum. You’ll be surprised how much you can accomplish when you really focus your intention and energy on solutions.

Think about where you want your career to be one year from now and five years from now.

Take the opportunity to move yourself closer to these goals.

Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. – Steve Jobs

Focus on personal development. Are there skills you can work on developing?

There are opportunities to take online classes for free. For example, the eight Ivy League universities are offering hundreds of online courses to the public at no charge. Many other course platforms are making courses available online for free or low cost.

With many of the free courses, you can also secure a certification for an additional fee, which you can add to your resume.

Speaking of resumes, now is also an excellent time to work with Distinctive Career Services to update your resume, LinkedIn profile, and other career search documents. Be ready to hit the ground running when the economy begins humming again!

Seek support from others during this time. In-person gatherings are highly discouraged, but you can use technology like FaceTime, Skype, and Zoom to meet up virtually with friends, family, and even co-workers.

Be sure to take care of yourself during this time. Eat right. Try to get at least some exercise each day. Get plenty of sleep. Take advantage of the programs and services available to you and be prepared for what’s next.

As much as possible, continue with regular routines. Routines can bring structure and a certain comfort to your life whenever there’s turbulence from any kind of change, transition, or crisis.

Give yourself some “down time.” It is inevitable that your sudden unemployment will trigger feelings of stress, and it’s important to allow yourself plenty of breaks for rest and relaxation.

Taking part in your favorite hobbies or just losing yourself in a good book or movie can give you time to recharge and help you deal with the current changes in your life.

Reach out to others for support. Recognize that everyone, without exception, lives through transitions.

If you are reading this while we are still in the midst of the COVID-19 crisis, we are all going through major life changes together.

Therefore, you can turn to others to hear their stories of how they got through (or are currently coping with) such life changes.