What to do before you lose your job
Job hunters and those about to become job hunters have to worry about challenges on several fronts — they have to find a job soon, the job has to pay an acceptable amount, and they have to pay their bills and put bread on the table in the meantime.
During this time, they also have to handle the stress of not knowing whether they will lose the house, the car, the savings, the retirement account, and possibly the jewelry and the collectibles.
If you are about to lose your job, time is of the essence to take care of your finances. If you do not have another job lined up, your time out of work may be indefinite and your cash flow uncertain.
Do you have an emergency fund to tide you over for three months, six months, or more?
If you don’t, then you must spring into action in order to survive the job loss. Let’s look at some areas of preparation to consider.
Applying for unemployment benefits
If you are about to lose your job through no fault of your own, you may be eligible for unemployment benefits.
Investigating them and learning about your eligibility well beforehand can ensure a smooth transition from work to unemployment, because there is some lag time involved during the process.
If you are unemployed for a long period and you don’t have any other source of income, then your unemployment benefits might become the basis of your financial planning.
Unfortunately, they will be less than (and perhaps far less than) what you are earning at your job, and unless you have a source of income coming from elsewhere, this makes conserving your funds especially necessary.
And one other thing to remember: your unemployment benefits are taxable. Factor that into your budgeting.
Negotiating a severance package
Many companies will give you severance pay. It varies greatly by company and whether you were fired or laid off.
You are also entitled to be paid for unused vacation time. Severance can sometimes be negotiated, so it pays to ask other employees who were let go how much they received. This can help if you need to negotiate the severance package.
Make healthcare appointments now
If there is a danger of losing healthcare benefits due to unemployment, it is to your advantage to make as many healthcare appointments now as you can.
Look into getting COBRA coverage
This program extends your health insurance for a time, though the cost will be higher than what you were paying before.
Here’s more on how to sign up for COBRA.
If money is going to be an issue while you are unemployed, a budget can stretch your funds during this time. Before becoming unemployed, track your expenses and income for a month or two to see where you are leaking money needlessly.
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Then investigate ways to cut expenses, that way you will be ready once you are out of work. Some online searches will give you dozens of ways to cut up to hundreds of dollars a month from your spending.
Seeing a financial planner can help you budget your finances, conserve money, and plan your investments and your insurance so that you are covered during this period of your life.
Even without an actual financial planner, having a financial plan of some kind can make joblessness bearable.
This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.