In our everyday life, there seems to be an automatic stream of conversation in which we’re all used to discussing on a regular basis topics such as work, family, and of course, how badly we could use a vacation. But what if you lost your job?
What would you talk about then? Suddenly, you’re unemployed, scared for your family’s financial security, and a vacation is the last thing you can afford. Suddenly money feels like a scarce resource you don’t have enough of.
We take it for granted that we all have jobs we can talk about; having a job also gives us a title, an identity, and a profession. In reality, almost every job is in a way temporary — your position can be terminated, phased out or cut at any time. Though being let go can feel alienating, there are ways to financially brace yourself and your family, should you find yourself unemployed.
Get the most you can from your employer
Some companies are generous, and it isn’t unheard of to receive a benefits package after a layoff. Following the news that your position is ending, ask your employer whether they can provide you with any of the following:
- Severance package
- A recommendation letter
- A letter stating reason for your termination
- Payment for unused leave including vacation, annual leave, etc.
You can use all the financial help you can get, and if your former employer is in a position to give you compensation, this will greatly help your transition to unemployment. Also, if your job loss had nothing to do with your work performance, having documents from your former job that describe you as a valuable hard-worker will give you a leg up when you try to find employment elsewhere.
File for unemployment
With all the information floating around out there on the Internet, it can be difficult to tell where you should really go to apply for jobless benefits. That’s because the process depends on the state you reside in. For example, this is the official site New Yorkers use to file a claim for UI Benefits. Do a little research by typing in your location, and terms like “unemployment benefits,” or “how to apply for jobless benefits.” For general information, the United States Federal Department of Labor site, shares information on how UI programs provide unemployment benefits to eligible workers who become unemployed.
If you’re unclear on whether you qualify for unemployment when you file a claim the unemployment office will review your eligibility for unemployment compensation and determine your status. You can also search for contact information in your state if you want to be proactive. For example, Washington has its claims contact center information accessible for local residents to utilize regarding questions on eligibility. Here is a quick overview of the process:
- You need to meet eligibility statutes regarding how you came to be unemployed. “Acceptable” reasons for leaving include layoffs, firings and downsizing.
- You’ll also need to meet state “base period” requirements, which examine how long you were employed, and will determine for how long you will be eligible to receive benefits.
- Once you’ve completed the application process, expect to get a ruling on your application within ten business days.
- When you’ve secured benefits, you’ll need to attend a One-Stop/Employment Service Office when scheduled, for workshops designed to help you with job training and counseling.
- To keep receiving your unemployment benefits, you’ll need to fill out your biweekly Unemployment Insurance claim form and keep up with your job search.
Here are answers to many frequently asked unemployed insurance questions you might want to take a look at before applying.
Consider your health benefits
Until recently, the only health insurance option available to unemployed workers was to pay for coverage for up to 18 months under a federal law known as COBRA, the Consolidated Omnibus Budget Reconciliation Act, enacted in 1986. COBRA stipulates that a company with 20 workers or more must allow any employee that has been terminated for reasons other than gross misconduct, to continue in their company’s group plan for up to 18 months.
However, the plan also stipulates that employers do not need to contribute toward the cost of premiums, making staying with an employer’s plan a very expensive option. The average monthly cost of a family COBRA plan last year was close to $1,400, and with a 2-percent fee charged by the former employer for administration, COBRA was a pricy plan that left many feeling cheated.
Luckily, for those unemployed looking for more affordable health insurance plans, with the implementation of the Affordable Care Act, unemployed workers can buy an insurance plan on the state health insurance marketplaces (also referred to as exchanges). Consumers who opt to pay for a marketplace plan have a set of 10 essential health benefits covered, and there are four plan types that offer different levels of cost sharing, so the unemployed have a choice in how much coverage they want to pay for, or need.
Tax credits are also available to those whose income range is between 100 to 400 percent of the federal poverty level, making insurance much more affordable to those who have little to spend. If you’re unemployed, it’ll pay to do your research and begin to explore the newly more attainable health insurance plans that can be bought on the state marketplaces.
The official benefits website of the federal U.S. government allows you to search for benefits and assistance by location and category as well. There are sources for those who need healthcare, housing, living assistance, food, and educational assistance. The site also lists other federal resources citizens can turn to, such as the American Red Cross, Salvation Army, The Catalog of Federal Domestic Assistance, Job Accommodation Network, and USDA’s Food and Nutrition Service.
Often, there are organizations and groups that take care of expenses for the impoverished and those lacking food, clothing and other necessities. These groups can include church offices or people in partnership with civic organizations. If you’re looking for help, contact your state’s office for Medicaid and food stamp assistance and ask what kind of services are available to you.
You’ll find that a hard day of Internet searching will yield many possible sources of support, such as the Home Affordable Unemployment Program, which can reduce your mortgage payments or stop them altogether for 12 months or more. Another common search has to do with nutrition. If you’re worried about having enough food to keep your family from going hungry, Feeding America has many food banks that offer assistance to those in need.
Reduce your spending
Though you would prefer to find an immediate way of making money in order to continue the spending habits you have grown used to in your daily life, for the immediate future you should try and stop all unnecessary expenditures as much as possible. Until you find a way to make money, the only way to maintain a cash reserve for your family is to reduce spending. Here are ten small and simple lifestyle changes you can make to save cash.
Rebudget and prioritize
Write out all your bills and expenses, and prioritize which are necessary and which, for the time being, could be cut. With your list of necessities, make phone calls for any bills that might let you slide on your payment until next pay period — utility, mortgage, loan companies, etc. We’ve discussed negotiating on bills before, and often taking the time to speak to someone with authenticity and sincerity is enough to spur a customer service representative to give you a discount or do you a favor.
Apart from that, you’ll hopefully have saved an emergency fund of at least six months of your income, that can help you get by while you take on a temporary gig or look for full-time employment.
Until you find a full-time job, try to use a skill you have or services you can provide in order to make money. On MyBankTracker, we’ve posted many articles on ways to make fast cash. Here are a few:
- 8 Unusual Money-Making Techniques
- Build Your Career or Earn Quick Cash: 13 Ways to Make Money Online
- Side Gigs to Help Boost Your Income
It’s important to hit the ground running and gain momentum once you’ve begun your job search. After a few months of looking for work, you’re bound to be feeling drained, so make the most of your hunt from the start. There are several things you can do while unemployed to keep yourself productive and even add to your professional value, such as volunteering, learning a new skill or, gaining certification.
Getting the news that you will soon be unemployed is no fun, and being a job seeker can be stressful, depressing and frustrating. However, as long as you have valuable skills, know that work is just around the corner, and with effort and diligence, you can acquire a reliable way of supporting yourself and your family. And for those of you who are currently employed? Start saving up a rather large contingency fund, because you never know when in the future you may need it.
Katherine covers the issues that are most relevant to younger adults, including topics such as college finances, student debt, and consumer spending. She has contributed to other web publications such as Business Insider and Investopedia.