In March, the U.S. economy added 303,000 jobs, well exceeding expectations (economists had initially forecast the addition of just 205,000). In spite of that, it’s not a given that you won’t be a victim of layoff this year. Sometimes, companies choose to downsize even in the strongest of economies.
If your job is given the ax, you’ll want to take some key steps shortly thereafter. Here are four important moves to make within 48 hours of losing your job.
1. See what severance you’re eligible for
It’s not a given that you’ll be in line for a severance package from your employer. But if you are, read your agreement carefully. Before you sign it, you should have a clear understanding of what pay you’re eligible to receive, and also, what rights you may be giving up by accepting that money.
Sometimes, severance agreements will seek to reinforce a noncompete clause you may have signed when you were hired. Noncompete clauses can be tough to enforce in practice, but you’ll want to make sure you’re not putting yourself in a position where it may become harder to get a new job.
2. See if you’re able to get paid for unused time off
If you’re entitled to vacation days and you haven’t used any since the start of the year, you may be eligible to get paid out for the time off you didn’t take since January. If you have a copy of your employment agreement spelling out what happens in the event of a layoff, pull it up and figure out what compensation, if any, you’re entitled to.
Otherwise, ask your manager or HR representative. They’re not going to lie to you if there’s a written policy somewhere, as that could get them into hot water.
3. File for unemployment
Generally, you’re eligible for unemployment benefits if you lost your job through no fault of your own, as opposed to being fired for a reason, such as chronic tardiness. It pays to get your unemployment claim in as soon as possible, because it can take time to process. And you want that money to start rolling in as quickly as possible.
Now if you’re getting severance, what may happen is that you’re not eligible for a weekly unemployment benefit until that pay runs out. To put it another way, let’s say you’re eligible for four weeks of severance. You can file for unemployment immediately, but you may not get a weekly benefit check until after your four-week severance period ends. But it’s still good to put in that claim immediately, in case there are issues or holdups.
4. Review your budget and savings
There’s really no way to know how long it will take you to find a new job after getting laid off. So it’s important to assess the state of your savings account and see where your emergency fund stands. If you have enough savings to cover three months of bills, a month of severance, and unemployment, you might conceivably have a total of about five months where you can sustain yourself before going into debt.
Now that’s not information you should use as a reason to put off your job search. But it might give you some peace of mind.
At the same time, you’re going to want to review your budget and see where there’s room to cut back. What if, for example, you have enough money to maintain your lifestyle for five months, only it takes you six months to find your next job? You don’t want to land in debt if you can help it, so see if there are some bills you can cut temporarily.
Also, you may have bills set to autopay that you don’t need to cover now that you’re not working. If you have a monthly train pass for commuting that’s charged to your credit card every month, you may want to cancel it for the time being if you’ll be spending the coming weeks mostly sending out resumes and networking from home.
Losing a job can be a big blow. But the sooner you make these key moves, the better you can set yourself up to get through that situation with minimal financial repercussions.
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