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All the financial experts tell us to provide for a rainy day, but so many of us delay planning. I feel we delay because we don’t really think about the things that could happen to us in a moment. A moment that changes how we will live our life in the days to come.
In the Total Money Makeover it is recommended to pay off debt and build an emergency fund before investing in retirement. While this advise on the surface seams crazy and goes against everything society has taught us about money, it is wise advice. Through experience I have learn just how wise this advice is for young professionals.
Expect the Unexpected
In the past 4 years I have lost my job 3 times, each for a different reason. Unlike the first two times, one merger and one acquisition, the third time was unexpected. One day the human resource manager and a manager for another department came to my office side “Your position is being eliminated.”
In one moment my future had changed and now I need to take steps to wrap this relationship up.
7 Things to do When You Lose Your Job
1. Take time, but not too much
The news is shocking and takes a little bit of time to process. Give yourself a day or so get your thoughts together. I like the quote “Cry about it tonight and fix it in the morning.”
2. Adjust budget
Sit down with your budget and determine what can be cut immediately. If you have auto draft or recurring bill payments set up, cancel them so you aren’t surprised later in the month.
3. Cancel retirement contributions
Stop all retirement savings contributions (TSP, IRA & 401k). At this time you want to collect any extra money you can before it stops flowing. This is temporary so you will make up for it once you move on to bigger and better things at the end of your job search.
4. Vision/Dental/Medical Appointments
Most insurances will remain valid until the end of the next pay period or month. Try to move or schedule all pending appointments to take place before your benefits end. Evaluate what your options are for future coverage during unemployment.
5. Flexible Spending Account
If you have a flexible spending account, you want to IMMEDIATELY determine the balance and spend it on eligible items on or by the last day of work. FSA is not valid past the last day at work. If you do not use it by your last day of employment you will lose it all. For a quick reference of items covered by FSA, visit the FSA Store.
6. Unemployment Benefits
Apply for benefits on the day after your last day at work. Once you apply you will have to wait a week or two before benefits will flow. Education yourself on the requirements to qualify for your weekly benefit.
7. Job Search
Every week apply to the minimum number of jobs required by your unemployment office. This can be found online with a simple google search. If you are doing an active job search, I recommend 25 jobs per week.
Look to the future
Job loss is hard, but not the end of the world. In the beginning (first few days) focus on getting the important stuff done. Then move on to a strong job search and focus on the future you have planned for you and your family.
If this job loss caused a financial crisis, be sure to start preparing for the unexpected once you are in a better financial position. I recommend you read and follow the teachings of Dave Ramsey.