Being laid off from your job is an earth-shattering experience, especially if you had little or no warning. The most important thing is not to panic. There are a number of solid strategies that can keep you surviving financially after you’ve been laid off.
1) Don’t hide it.
Let your family and friends know of your situation. Sometimes the people who you love will tempt you to get involved in activities you can’t afford at the moment. You’ll want to do it, because you are embarrassed about your situation. Really though, people will understand, these things happen. Others will only be embarrassed if you are. Don’t be.
It is especially important to let children know of the problem. Enlist them into ways of saving money – turning off lights to save utilities or temporarily lowering allowances to help the family. It can be a way for the children to be involved in a solution, instead of being afraid for their future.
2) Take stock of what you have.
Carefully examine the details of any severance package, especially any pay for leave and sick days. Check the status of other benefits like 401k Retirement Plans and medical insurance coverage. Get up-to-date balances on all savings and investment accounts as well as all loans and credit cards.
If you are eligible, file for unemployment benefits as soon as you are eligible. Do your homework to see if there are life insurance policies with cash values you can borrow of of in an emergency.
3) Develop a tight budget.
Even if you hate to budget, now you have to. Important items like mortgage, utilities and car payments come first. Other items need to be prioritized. Start making only minimal payments on all credit cards and installment loans.
Have a family meeting and discuss ways to cut on costs. Consider things like eating out less and doing more activities at home. You want to still have some money in the budget for an occasional movie or night out, but occasionally only.
Your goal through all this is to keep as much of your liquid assets for as long as you can. Cut off all credit card purchasing to only the absolute essentials. Don’t close any accounts, because you may need to live on them them later if your savings erodes too low.
4) Consider selling some items.
If you are in anyway typical you have lots of items around the house you don’t use anymore. Sometimes those items can be turned into important money by selling to friends, on eBay or having an old fashioned yard sale. It is a great way to turn unwanted items into needed cash.
5) Become a smart shopper
Watch for sales and consider buying food and staples in larger, more economical packaging. Read labels closely. Experiment with cooking recipes that use cheaper ingredients but still have excellent taste.
6) Stay active
It is a hazard of getting laid off to sit around and become depressed. Don’t let that happen to you. This can be a great time to look at your personal and physical life and consider changes. Grown flabby? Start exercising. Keep a schedule. Get up in the morning, shower and dress. Keep a to do list and work on it diligently every day.
7) Get into the job market
Get a good resume and start job hunting. Check classifieds every day as well as job search websites like monster.com. Even if the lay off may be temporary, consider getting a temporary job to keep you busy and bring in some extra money until things stabilize.
Also, take a good look at your qualifications. Is there something you can do to improve how employers might look at you? Consider updating a critical certification or taking a course that will broaden your skills.
8) Set goals
Set yourself specific things for you to work on towards getting things done. This might be mailing 10 resumes each day to prospective employers or exercising four times a week for forty minutes. As you reach milestones it will make you feel better and give you confidence.
9) Regularly recheck your finances and job search results. Is there something better you can be doing? Are you cutting back on expenses like you should, or is money leaking away too fast. Keep constant track of the level of all balances.
Keep active and work intelligently. Surviving financially after you’ve been laid off comes down to not panicking, using your assets wisely and working smart. Do these things and you’ll survive and come out even stronger out the other side.