What to Do When You Get Laid Off

What to Do When You Get Laid Off

Most of us wouldn’t associate the words "joblessness” and “fun,” but unemployment coach Katie DeVito says she wouldn't have it any other way: "The best thing that ever happened to me was getting laid off."

After the loss of her communications job, DeVito tweeted to find out how many fellow New Jerseyans were also out of work. With that tweet, she found her calling: The overwhelming response inspired her to found NJ Unemployed, a support group for job-seekers in the Garden State to exchange stories and advice for moving forward professionally after the loss of a job.

Now the site has over 1,000 members, and DeVito says being part of the community helped her not only find a new job, but put her fate in perspective.

Here's what to do — and what behaviors to avoid — when you want to get back on the career track.

Don’t: Panic

You don't have to descend into an anxiety spiral. There are always options, and the key is to let yourself have the time and space to determine what those are. You won't be able to move forward without a clear head and an open mind.

This can be as simple as taking the time to gather all of your contacts off of your computer, so you can send a thoughtful email. One friend, instead of letting anger get the best of her, spent her last hour in the office writing a letter to HR stipulating why she deserved three months, instead of two weeks, of severance. The end result? An extra $15,000 in her emergency fund while hunting for a new job.

Do: Accept Your Situation

Stave off panic by stepping back and taking stock of your own feelings. “Validate your right to feel miserable,” Dr. Robert L. Leahy, author of  "The Worry Cure," advised on NPR. "You're a human being. You have a right to feel unhappy." Once you’ve given your emotions space to exist, you can start to see the big picture more clearly.

Don’t: Borrow Blindly From Your Retirement Account

When your cash flow begins to dry up, you may be tempted to turn to your retirement account. But you should think twice before cashing out part of your 401(k) or IRA while unemployed. If you do, you could find yourself with the extra burden of taxes on the funds you withdrew (for contributions to retirement funds that are pre-tax) and a 10% penalty if you crack into your nest egg before you're 59.5 years old. In general, breaking into your retirement savings early could erode 40-50% of the money you take out because of taxes and fees.

If you're still unemployed when the tax bill comes around for your withdrawals, this could cause yet more problems. Unless these funds are the only thing standing between you and losing everything, try to hold off. After all, that's what your emergency fund should be for.

Do: Rethink Your Priorities

Once you’ve established a particular standard of living, it can be tough to adjust that downward. Tweak your budget, particularly if you're living off of your emergency fund. You'll need to think about where you can cut back so you don't eat through your savings.

Don’t: Avoid Creditors

Personal pride can often get in the way of asking for help, especially if you’re feeling ashamed, but talk to your creditors right away to explain that you lost your job. Banks and creditors benefit more from "sustainable" customers than they do simply from the assets they collect, so they have a vested interest in you. The more your lenders know about your circumstances, the more likely they’ll be to help you, by renegotiating your credit terms or freezing your interest rates, though the terms attached to that will depend on what kind of loan you have (student loans, credit cards, etc.).

Do: Review Your Health Insurance

Losing your job often means losing your health insurance. While COBRA is an option, it can be expensive. If you can be covered under a spouse’s health insurance policy, arrange this as soon as possible. Otherwise, a broker can help you shop around for the best alternatives.

Don’t: Clam Up

“One of the biggest mistakes I see people make is not engaging with others when unemployed,” DeVito says. The shame of job loss, she says, can scare people away from social interactions. But that only increases the negative pressure on an already stressful situation. Whether you network in your industry, volunteer or take a class, DeVito says putting yourself out in the world is often the path to new ideas, opportunities and energy. Yes, even when you’d rather stay home alone.

Blogger Penelope Trunk recommends spending unemployment time “creating projects for yourself and executing on them. It's good for you mentally," she says, "because you are doing something meaningful with your time and that will keep your spirits up.” Volunteering can also boost your mood by putting your situation in perspective.

Do: Take a Balanced View of Your Situation

It's not healthy to beat yourself up because you got laid off in the middle of hard economic times. Getting laid off is dishearteningly common, and you don't want to wreck your confidence over something that's out of your control. If you've lost a job more than once, though, think seriously about why that might be, or what common threads you can find between those experiences.

Don’t: Neglect Your Well-Being

A Duke University study revealed that the risk of heart attack was significantly higher among the unemployed than those who hadn't experienced job loss, underscoring the importance of taking care of your physical and emotional health.

Watch your stress levels, whether that means taking up meditation, yoga or simply trying to smile more.

Don’t let yourself become too busy to exercise, especially because it’s been shown to reduce stress and help people build stronger relationships.

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