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Job loss ranks as one of life’s most
challenging events. Some of the issues involved include, adjusting your
finances, looking for a new job, and coping with the emotional and
social impact of your new situation. It would be much easier to deal
with it financially and emotionally if you’ve prepared for the worst by
planning ahead, but even if you failed to anticipate this sudden change
in your circumstances, here are some practical steps to take if the
worst does happen.

Don’t panic

When you think about all the bills and
monthly expenses you have to face without a steady income, it is easy
to despair. Try to remain calm and do not rush into any major financial
decisions whilst you assess your situation; you need a clear positive
outlook. Even if you are eligible, be cautious about dipping into your
retirement savings account.

Do you have any savings?

How much money have you saved? How long
will it last based on your monthly bills? The importance of an
emergency fund becomes glaring in situations like this. If you have
been able to set aside say 6 months of income in a high yield money
market account, you will be able to pay some of your bills and relieve
some of the financial stress while you look for new job. But if you
have always lived from month to month, this may not be an option.

What are your entitlements?

What do your full entitlements amount
to? If you have no savings at all and you are fortunate enough to
receive severance pay or other benefits, use this as a bridge to tide
you over the difficult period. Spend carefully, and do not use all of
your entitlements to make large payments such as your mortgage as you
might have to live off that money for what could be an extended period
of time. Don’t let such funds lull you into complacency; you need to
actively seek a new job or other income generating opportunity.

Revise your budget

How best can you adjust your budget to
suit your new circumstances? Develop a new written budget to cover
several months based on what you have saved and any expected income.
How much will it cost to maintain your family, your home and lifestyle?
Keep your family members fully in the picture so that they too can
adjust their expectations about what you can afford. You will have to
control your spending by cutting back on nonessential expenses.
Naturally your priority will be for housing, food, utility bills. Of
major concern would be the lack of access to affordable insurance and
appropriate health care. This must also be planned for.

Be cautious about borrowing

It is tempting for credit card holders
to start to load day-to-day expenses on their cards. Try to avoid doing
this unless absolutely necessary and only for critically important
expenses that cannot be delayed. Taking on additional debt can keep you
in denial about your true financial situation and can make things worse.

If you are unable to fulfill your
financial obligations, such as your mortgage or car loan, contact your
lenders immediately and inform them that you have lost your job and are
actively seeking new employment. It may be possible to negotiate new
terms and come to an arrangement to adjust your payments for a limited
period of time. It is better to be approach them upfront rather than to
fall behind with your payments. If you default on your home or vehicle
loan, your bank will take steps to re-possess your property.

Stay socially connected

Some people feel embarrassed or
inadequate after losing a job. Don’t withdraw and let negative feelings
stop you from taking important steps; you need your network now more
than ever before. Reach out to family, friends, ex-colleagues and your
network and spread the word that you are in the job market. By seeking
support you may find they may be aware of new opportunities for you.
Your CV should be carefully updated and circulated.

Seek alternative sources of income

With the sheer number of people
currently searching for jobs, you need to cast your net wide, and not
just for the same type of job. Be practical and flexible and don’t
pigeonhole yourself into a specific role or job so you can increase
your chances of finding work. Consider temporary or part time work that
will generate income and give you the time and flexibility to attend
job interviews and actively pursue a more permanent position. This
might be a time to upgrade your skills, or go back to school which will
all add to an impressive resume.

If you have alternate sources of
income, you will be in a much more comfortable position if you lose
your job. Your hobbies, talents and skills and other interests may be
converted to a business and offer serious possibilities for income.

Be Positive

Apart from the financial issues
associated with job loss, there are usually emotional and personal
aspects that are too often ignored. Whether yours was the only position
that was cut, or an entire unit or department, the feelings caused by
being laid off are largely the same regardless of the circumstances.
Many people experience a loss of self esteem, a sense of failure and
even depression after retrenchment. But it’s important to take your
next steps based on clear rational thought, devoid of emotion.

As difficult as this may sound, one should try to think of losing
your job as a positive event, an opportunity to re-evaluate your future
and, potentially change your career or start a new business. Losing
your present employment may well be the impetus, just what you need, to
take a fresh look at your life and re-define your goals. Often, it is
times like this that propel people into greater things.