I Lost My Job ... Now What?

Practical ways to recover from the potential biggest crisis of your 20s.

Losing your job is about as comfortable as getting sucker-punched in the gut. With the unemployment rate surpassing 10% for the first time since 1983, nearly 16 million people are having to learn how to deal with that sucker-punch. Those with the least amount of experience (like recent college graduates) are often the first to take the hit.

So what do you do if you’ve been handed the pink slip? Some feel lost, even feeling like God has abandoned them. Others sit back and say, “Okay God, I’ll wait for you to provide.” And plenty of others just find themselves sitting on the couch, renting the collected works of Michael Bay, too paralyzed or stunned to wrap their minds around what just happened.

Budget counselor Rick Dernberger says that while you can, and should, take time to grieve the loss of a job, you should be careful not to over or under-react. “Sometimes extreme over-reaction can transition into extreme under-reaction,” he says. “It is our mind's attempt to protect us from all of the unpleasant consequences of the job loss. If you find that one or two weeks after a job loss you are still not sitting down and ‘facing the music’ in terms of impact to budget and some of the long term financial implications, chances are good that you have gone into ‘turtle mode.’”

Ah yes, “turtle mode:” That blissful feeling of denial that says, "as long as I don’t think about being unemployed, maybe it won’t be true." But of course that can’t last for very long. And whether or not you have gone into that mode, it’s important to seek out help.

“The number one mistake I see is that people wait too long to get help with their financial challenges,” says Gerri Detweiler of Ultimate Credit Solutions, Inc. “Generally I would say Americans are pretty optimistic, believing in self-reliance, and so we think ‘I can handle this all on my own.’”

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While a Google search for new jobs might be the first thing on your radar, take a step back and look at your finances. Though it may be difficult, figure out what your expenditures are: bills, groceries, rent, insurance ... anything that causes money to leave your pocket and not return.

“You need to figure out the essentials,” recommends Detweiler. “What has to be paid and what bills might be negotiated? If you owe, try to explain what’s going on and ask if you can pay less or defer for a while. Only spend what needs to be spent, cutting out the luxuries.”

This may mean canceling cable TV, riding your bicycle to save on gas and not buying the extra bag of snacks at the grocery store. Instead of spending $30 eating out for lunch each week, PBJ’s and apples could only cost you $5.

Taking the “expect for the best, prepare for the worse” approach, two areas that need to be taken care of as soon as possible are school loans and unemployment insurance. If you have student loans, you will want to talk to the provider immediately to try to get those loans deferred or payments decreased. For other loans, some lenders will be willing to be a gracious as long as you make every effort to pay a little and and let them know what’s going on.

“What happens is people wait, the paperwork takes a little while, and if you miss a student loan payment, you may not be eligible for a forbearance program or deferring it,” Detweiler cautions.

Information on unemployment insurance can be found here. While the rules differ from state to state, the general idea is that anyone who loses their job involuntarily, without fault, and is seeking employment is eligible. They can collect for up to 26 weeks, though President Obama is expected to sign a bill that extends that number to 14 weeks, and for up to 20 weeks in states where the unemployment rate is above 8.5%.  

Once those two priorities are nailed down, you can begin to think about what’s next. Do you have a budget? Have you talked to a non-profit credit help agency? Most will give a free first consultation, even if you don’t have extreme debt. Detweiler recommends Crown Financial Ministries, which offers free financial mentoring.

And speaking of credit, do not depend on your credit card to sustain your standard of living. Credit card debt runs up fast; adjust your standard of living and if possible, put those cards out of sight, even giving them to a trusted friend or relative. Many rely on credit and by the time they find another job, it takes years to pay back what they charged. Instead, consider asking a friend or family member for a loan.

“If you need a gift, ask for a gift; if you need a loan, ask for a loan,” Detweiler says. “If you need a loan, make it official; there are services that let you get a free promissory note online. If you approach someone professionally, it is a lot different than just asking for a couple hundred bucks.”

Another common mistake that both Dernberger and Detweiler caution against is cashing in your retirement plan. By doing this, not only would you pay taxes on the earning but also incur a 10% penalty. By the time you actually get the cash, there's not much left.

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“What they should do is roll it to an IRA, which sounds complicated, but if you go to an agency like Charles Schwab, they will have the paperwork for you to fill out,” says Detweiler. “If you roll over into an IRA, there are typically no fees.”     

When you have taken care of the basics, get back out there looking for a job. Tell friends and contacts about your predicament and use your network to locate opportunities. If you haven’t done so, update your resume. It won’t be easy and it might be slow going, but losing your job isn’t the end.

“Learn to embrace change,” Dernberger encourages. “Many people report some of the most significant positive growth that has ever occurred in their lives happened after an involuntary loss.”

As you go through these changes, learn to trust God and rely on His provision of peace and comfort. It is not an excuse for inaction, but it will be a way to find peace within the craziness.



David Rupert commented…

There are some great resources on work and faith at the High Calling. (www.highcallingblogs.com)

a recent article, "Where is god when you lose your job" was excellent.

We all need to support each other! With the march of socialism, unemployment is the new norm!

Salt and Light


Emily2695 commented…

Can I just say, God's timing is...well God's timing! This article came almost a week before I got terminated from my current job. I wasn't able to read this e-mail till today (the day I got terminated). I just had the realization that I even got to use my sign language before I left, I got to help someone understand. All the things mentioned are things I'm dealing with. Got some encouraging words from one of the Decons at my church, now it's time to

Paula Boardman


Paula Boardman commented…

I was downsized a month ago. In the past year I've gone from being store manager, to floor manager, now I'm just part-time sales. It really bites. So now after 3 years of working HARD for the company, I'm having to head out into the world and find a new job. Thankfully I can still cover my bills, but it's going to be hard until the new job comes along. To all those who have lost their job, I commend "justgotoutofthatboat" with the comment that "a job is a job" - as someone who used to hire for her current company, gaps in a resume aren't favoured!


Anonymous commented…

Yeah but what if you never made much in the first place? I believe wholeheartedly than society/government does not give people room to grow or make money or move out of being poor.

I just got married cheaply, than laid off three months later. I already drove the cheapest car you could buy (2000 dollars). We moved in with my parents. Had no mortgage. Still can't pay bills. Just got a new job but boss won't keep promises of raises or health insurance. I still believe the economy is collapsing and it's not over..heck banks are creating more fees than ever and it's predicted that in a couple months they'll just drop poor people all together and only take people who have thousands to deposit.

I already try to walk places and save money. I never lived "high" enough to now live "low" enough to save money. I was already "low". And how am i supposed to go back to college, or reinvest myself so I can live better and be more valuable if I can't make money in order to pay for school etc?

You see. When credit counselors or bank tell me I'm not responsible I laugh. I've never once in my life lived beyond my means. I just kept living according to my means which wasn't much and left no room to grow. You see. No body ever TAUGHT me to live "under" my means. That's what it's about except....hold on...I already had the cheapest car you could buy and the cheapest wedding...so how am i supposed to live any poorer? Oh that's right I've had people tell me to not buy a car or have a wedding in a court house...o.k. i have one life and I am just gonna live to the lamest with no fond memory that sounds great! (excuse the bitterness but this is true).

Most of our debt is school bills (that led to no jobs) and a couple small wedding bills.

So it brings me to my final point. It's about education. Rich people are educated by their parents and by their schools about money. Poor people are not. This is why I feel it is a government problem. They must start educating people about ACTUAL things that make up life...not math, gym, and art. We should be learning about money, morals, emotions, and the work place. About the things that hold us back and how to overcome them. This would get us a lot further and make us more equal. I can tell you if someone pushed me I would not be where I am. I am a hard worker, I just didn't start early enough.


Virgie60 commented…

Bankwatcher, I agree with many of the things that you have said. We too do not live above our means. We just got stuck with many medical bills and an income that did not help provide enough to pay for them. We too drive old cars and yes that is plural but we need both because we live in a rural area and have to drive 15-25 miles one way to work so we need them both. But we will probably drive them until they die. I do not need fancy cars.

But I really agree with what you said about educating people about ACTUAL things. My daughter does online schooling so I can really get involved with what she is learning and sometimes I just want to scream. Yes you do need art if you want to be an art major, same as for gym but I really feel that our kids should be learning about budgeting, loans, credit card debt, retirement plans, etc. I know that I really want to teach my children to plan for the future. If we had done that maybe we wouldn;t be in debt so far. My husband and I are also hardworkers but also did not start learning about budgeting early enough.

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