Lost Your Job? Follow These 10 Steps to Get Back on Your Feet!


Losing a job is very emotional because, for most of us, our self-esteem is tied to our occupation and to our income level. However, loss of income must be dealt with immediately to minimize or avoid additional financial crisis and stresses in your life. Here are the immediate actions you need to take when you lose your job.

Go into a "Crisis Management Mode." In fact, even if you haven't lost your job, you should develop a written plan on what you would do if you did. Write this plan when you're not emotional. You will need to carefully think it through. Review it with your family so that when the time comes to execute the plan, they're already on board.

Develop an emergency fund with 3-6 months of living expenses. You can choose to have more than that if 3-6 months is too short for your personal comfort level. Also, have alternative sources of income as a back up to your W-2 income. See related article on 'Make More Money" for sources.

If you have lost your job, print this out and complete each step within 48 hours.

Step #1 - Tell your family that you lost your job and that expenses must be cut temporarily until you find another one. Emphasize the "temporary" part so you get as much immediate cooperation and support as possible.

Step #2 - Immediately apply for "unemployment," even if you have received a severance package. Some states don't consider severance as income from a job. Your local unemployment office also has many other resources to help you get back to work.

Step #3 - Discontinue input into any savings or investment plans, including IRA's, 401K's, etc. Remember this is temporary, when your income resumes you can go back to your normal investment strategies.

Step #4 - Take all credit cards from family members to ensure that your credit card debt doesn't increase while you're without income. (Actually, credit card debt is bad debt no matter how or when you use it.) Make the minimum payment on credit cards while you're without income. However have this be one of the first items put back in the budget when you can. You'll want to continue your Debt Elimination plan, which is paying more than the minimums on your credit cards.

Step #5 - Although clothing is a need, you already have clothing. Temporarily cease buying new clothes or any additional clothes until you resume your income.

Step #6 - Call your creditors and let them know that you have lost your job and need help in reducing payments or lowering of interest rates. You will be surprised that some creditors will work with you because of a job loss. Either way, it's worth a try. You definitely want to call your mortgage company, as well.

Step #7 - Food is a need but not all food is good food. Examine your food purchasing habits and determine if some foods are "wants." Soda's, desserts, snacks, (etc.) have no nutritional value so eliminate them immediately from your food purchases. Also, if you are eligible, apply for Food Stamps to supplement your food cost until your income returns.

Step #8 - Change how you entertain. If your current entertainment habits are costly, change them for now. If you like movies, go to the library and check them out for no-cost entertainment. Look for free concerts in the park or other free activities in your area. Play games that you have more frequently with family and friends instead of spending money to go out for entertainment. Have a potluck party. Everyone brings food and you supply the music.

Step #9 - Plan a family meeting to discuss "Needs" versus "Wants." Eliminate all items that are wants. Cable TV is a want, not a need. The only real needs in life are food, clothing and shelter. Everything else is a want, including a car, if you could ride a bus or walk to get around. You must do these items even if you have an "Emergency fund." Why? Because you don't know how long you're going to be without the income. You want to avoid any other major financial crisis, like foreclosure, bankruptcy, and declining credit.

Step #10 - Update your resume and put together a plan -- apply for jobs, go on interviews, and call friends and associates for job leads, at least 8 hours every day. Don't allow your job loss to make you a couch potato or a daytime TV addict. The key here is to find another job as quickly as possible.

Doing these things will help you avoid other financial crisis caused by job loss; and will open you up to new job opportunities that are waiting for you to discover.

Consider creating a Cash Machine to produce extra income or to start a business of your own. Get "Discover Your Skill Set" & "1000 Cash Machine ideas" free, click here >>

Ready GO

Back to Index of Articles