By Marisa Torrieri
This story originally appeared on LearnVest.
Losing a job can be incredibly traumatic. Even if you knew office cutbacks were likely, getting a pink slip is still a huge shock to your system. It’s likely that both your professional self-esteem and your financial security have taken a hit, and it can be easy to feel a bit lost in the aftermath.
The good news is that you’re not alone.
Thirty million Americans, or almost 20% of the workforce, lost a job between 2009 and 2014, notes a report from the John J. Heldrich Center for Workforce Development at Rutgers University.
But simply knowing that millions of people have been in your position doesn’t help alleviate your biggest concerns: Now that you’re entering the world of the unemployed, what do you do first to get yourself up and running—and working—again? How can you learn from what happened and move on in a productive way before you burn through all your savings?
To help you get on the right track, we tapped career, financial, and psychological pros for advice on the steps you should take immediately following a layoff.
1. Do Nothing—at Least for the First 48 Hours
When you’re told you no longer have a job, your first instinct may be to talk trash about your company on
But the best thing you can do, says New York City–based career counselor and coach Lynn Berger, is to give yourself time to simply absorb what happened. So instead of propelling yourself into some kind of action, hit the career pause button for a few days until you get to a place where you aren’t feeling overly reactive or making rash decisions.
In the meantime, channel your pent-up emotions in less public, non-career-oriented ways. “If it’s helpful for you to call your friends, you should do that,” says Berger. “If it’s helpful to take a run around the park, do that.” Just make sure you’re talking to people who are likely to be supportive, not critical, of your situation, she adds.
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2. Get the Financial Lay of the Land for the
As you’re processing the effects of the layoff, it’s smart to go ahead and file for unemployment benefits, if you’re eligible.
“It can take a while for benefits to kick in, and there’s no real advantage to waiting,” says Colin Drake, a Certified Financial Planner™ with Drake Wealth Management in Sausalito, Calif. “If you wait, you’re leaving cash low and peace of mind on the table.”
Then, assess your finances and make a spreadsheet of all the bills you’ll need to pay for the next six months. That may seem like a stressful thing to do right after losing a job, but it’s better to know what’s ahead than to worry about money without being clear on the facts.
Once you have a handle on your expenses, you need to figure out how you’ll pay your bills—likely with smaller cash reserves.
First, consider using any severance pay or unemployment compensation that you get. Then, says Drake, assess which of your financial accounts to tap and in what order.
“Anything you have in cash or a taxable savings account should be used first,” he says. If you have investments in a brokerage account and only a month or two of emergency savings, now might be a good time to evaluate whether selling some of your investments to add cash to your savings could be a good move.
You will also need to get clear on what credit you have available to you (e.g., a home equity or bank line of credit, etc.) and have a plan for accessing that if you need it, starting with the line of credit with the lowest interest rate, he adds. Although having to borrow to tide yourself over isn’t ideal, it’s at least good to know what options are available, and at what interest rates, so you can be careful about how you use your credit.
One thing you shouldn’t do is scale back so much that it makes life unpleasant. In other words, it’s probably fine to keep your basic standard of living unchanged—groceries, coffee with friends, a gym membership, etc.—if pausing on, say, saving for that big trip to the tropics frees up enough money to keep you afloat. “People tend to cut back on the little pleasures, but that’s probably not going to make a big difference,” says Drake. “Job searching takes energy and positivity, so it’s important to keep the things in your life that fuel that.”
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3. Assess Whether This Is an Opportunity for Real Change
As you’re coming to terms with being laid off, try to look at the positive things that could come out of this forced change—including the fact that you now have the freedom to explore better jobs or even a new career.
“Many times, [losing a job creates] a good opportunity to figure out the next steps for ourselves—what is working, and what isn’t,” says behavioral expert Dr. Ben Michaelis, author of “Your Next Big Thing: 10 Small Steps to Get Moving and Get Happy” and a practicing clinical psychologist in New York City. But you can’t envision those new possibilities if you’re thinking only about all the negative things that come with getting laid off.
Sure, you may feel some nostalgia for the job that was, but in all honesty, there were probably things you hated about your daily grind. Once you’ve embraced your loss as an opportunity, consider what you liked about your last job (such as flexible hours) and what you’d like to change (perhaps a lower-than-average salary). Refer to this pro/con list before embarking on your job search. In doing so, you may come to the realization that you want to go in a different direction altogether.
“Become very clear and focused as to what you’re looking for,” says Berger. “If there’s a certain kind of work you want to do, perhaps you can set up alerts for those types of job vacancies.” Also, do some digging on LinkedIn to see if there are professional groups you can join to help you learn more about careers that interest you.
4. Get Your Layoff ‘Story’ Straight
Once you’ve taken all of these other steps and know what kind of position you want next, it’s time to start moving forward with your job hunt.
First, work on crafting your explanation about what happened. You want to make sure that when you’re asked about your last job, you have a clear, truthful explanation at the ready that also puts you in a good light.
Next, put yourself on a regimen with specific action steps. For example, recommends Michaelis, try to create a schedule with tasks to accomplish during your “normal” working hours—such as searching for jobs between 9 a.m. and 11 a.m. on Tuesdays and Thursdays, or having networking lunches every Friday.
Even scheduling a gym visit for first thing in the morning is a good way to organize your day and set yourself up for taking action in a positive way. As Michaelis explains, “The act of getting up and having purpose is critical to helping yourself.”
