High-Impact Money Moves for the Recently Unemployed

How to get your finances in order after losing your job.

How did it happen?

How were you told you were losing your job?

• Was there an unscheduled meeting with your boss?
• Maybe it was a drive-by one-on-one with a “Sorry to do this,” platitude.
• Or it could have been an all-hands meeting to tell people en masse.

What happened afterwards?

If you’re anything like me, you vacillated among anger, despair, and shame.

• Anger that the company you worked so hard for is so callously cutting your livelihood out from under you. It’s getting your heart cut out with a spoon.
• Despair that you are now one of millions that have lost their jobs, with everyone scrambling to find another one, and companies have suspended hiring indefinitely.
• Shame that you have to tell your family that their lives are going to be uprooted and any expectations for the immediate future are now put on indefinite hold.

Maybe you’ve been through a couple of recessions already and are well aware of the trauma that is coming down the pike when your job hunt hits a dead end, unemployment income stops, and your skills gap gets bigger every day.

Unannounced unemployment is an emotional roller coaster, enough to make anyone’s head spin. There is so much to get done that it seems overwhelming just making a to-do list, much less acting on it.

That’s why I put this list together of immediate steps to take when you have lost your job.

It will help guide you through the first few days and weeks of unemployment, helping to protect the money you have and find a way to replace your lost income.

Income

It might be weird that I list income as the first thing to address after being laid off but stick with me here.

If you are anything like my family, you try to save a little bit of your paycheck or even put some into your retirement account.

And the rest? Well, you and I both know the story.

You’ve got to keep the lights on, feed the hungry mouths, and pay the annual fees like car insurance that you always forget is coming.

Our paychecks are already spent before they’ve even cleared the bank.

Cutting expenses is an important and immediate solution, but you need to put first things first and set yourself up for your future income.

Unemployment Insurance

The hardest work in the world is being out of work.

I understand that it will take more than just a day or two to find your next job, so I’m not talking about replacing your salary. Rather, you need to file with the unemployment office ASAP and get your unemployment checks starting.

With millions of new weekly unemployment claims during the past few months, state unemployment offices are running behind, so get your claim in quick! (It doesn’t help that many state offices are running on decades old software.)

Also, the CARES Act adds $600 per week on top of whatever your state would pay you. This extra money will only last through July 31 before dropping down to just the state level payment, so get your application in quick!

Former Job

Take this job and shove it. I ain’t working here no more.

If you thought (or hoped) that you were done with your old job after they kicked you to the curb like an unwanted mongrel, then you are sadly mistaken.

Employers will pay you out for the remaining balance of you PTO, but it is up to you make sure that any vacation, sick, or other unpaid time from your old job is processed properly and added to your last check.

This will probably include a few uncomfortable calls to HR, but it will be worth it.

(Besides, you don’t work there anymore, remember? So you can afford to have those uncomfortable calls with little to no consequence.)

Future Job

The trouble with unemployment is that the minute you wake up in the morning, you are on the job.

After dealing with your old job, you need to start looking for your next one.

If you haven’t already, update your resume PDQ. Unfortunately, a recession this deep is going to send employers into shutdown mode, so you’ll need some ninja tactics to get hired full-time.

And that means networking.

Up to 85% of all jobs are filled via networking, most of which are never even posted. Since the old days of going to meetups and events are now over, it is more important than ever to get comfortable connecting with people online.

At the very least, update your LinkedIn profile to match your resume.

If you want to get back to work full time, then you need to follow the adage and make finding a job your full-time job.

Side Hustle

The best time to plant a tree was 20 years ago. The second best time is now.

I’ll also give you this nugget to chew on. Amid the turmoil we are all going through right now, it might be a good time to reevaluate what type of job you truly want.

• Are you in the right career, company, or location?
• Do you have kids that you want to stay home with instead of sending them to daycare?
• Is it actually cheaper (and safer) not to go to work?

In the meantime, you can always work on that side hustle that you’ve neglected for so long. (Writing on Medium, anyone?) You will be flabbergasted at what people will be willing to pay for, and the opportunities to help those in need will skyrocket over the next 6 months.

Still have your job but afraid of future layoffs?

Now is the perfect time to begin, as it will give you a head start for if/when you do get laid off in the future.

Government Assistance

Every time I hear a politician mention the word ‘stimulus,’ my mind flashes back to high school biology class, when I touched battery wires to a dead frog to make it twitch.

I’m not talking food stamps, but rather the help that is available to every American, regardless of income.

Part of the CARES Act includes payments of $1,200 for every adult and $500 for every child in your household. If you haven’t received it already, make sure the IRS has your correct information.

This is a good chunk of money that is just a few minutes away.

My advice here is to be very careful with this stimulus money. Once you have it in your checking account, if you don’t have an immediate need to spend it on food or shelter, take a night or two to sleep on how best to spend it.

Don’t make your dopamine receptors twitch like the dead frog and go on a quick spending spree. Make sure you get the biggest bang for your buck.

Expenses

This is the heart of the matter. Even if you get the full unemployment amount, your vacation payout with your last check, and some dough from your side hustle, you will probably not bring in your old salary at the outset of unemployment.

So that leaves us with cutting expenses.

In order, you need to address:

• Housing
• Communications
• Food
• Transportation
• Health Care
• Debt

Housing

Home is where the heart is.

Your home is the first place to financially secure.

Before even food in your belly, you want a roof over your (and your family’s) head. It provides shelter from the elements, a place to store and cook your food, and somewhere to sleep and recover.

Mortgage

If you own your home, the first step is to call your bank or loan servicer and tell them you lost your job. Explain that you are working on finding a new job, but that you just cannot make the payment in the immediate future.

Evictions are costly for these companies, so keeping an honest homeowner that just happened to fall on hard times is better than paying for an eviction and risking an empty house just sitting there with no recourse. (This is a probability given the intensity of the upcoming recession.)

About half of all mortgages are financially guaranteed by Fannie Mae and Freddie Mac, and they have agreed to suspend all evictions and foreclosures for homes owned by them. The same is true for mortgages backed by the Federal Housing Authority.

And here’s the biggie.

Fannie and Freddie have agreed to expand their forbearance program, allowing homeowners to suspend their payments for up to a full year.

Just remember, call your loan servicer early and often to get them your most up to date information and find out if your mortgage qualifies for the extended measures.

Rent

Renting is a double-edged sword right now.

On the one hand, you don’t have a multi-hundred-thousand dollar asset that you are at risk of loss due to missing payments.

On the other hand, evictions are easier and quicker than foreclosures, which can result in you being without shelter much sooner than homeowners.

There are no national protections for renters, in either apartments or homes. That being said, most rental agreements have specific language for late or missed payments.

If you need financial leniency beyond what is spelled out in your lease but your property manager is holding you to your payments, start calling the corporate office. Odds are, you’re not the only one in your apartment complex, so talk to other tenets and start mass calling.

For those of you renting an individual home, contact your landlord immediately and let them know what’s going on with your income. Since most rental homes are owned by individuals running an extremely small business, they may have more flexibility than the manager of an apartment complex that is held to a standard sent down by the corporate office.

Utilities

Many states and municipalities have required utilities to cease disconnections and shut-offs during the coronavirus pandemic.

Government bodies have ordered disconnection suspensions statewide in California, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and Wisconsin. West Virginia regulators are “urging” utilities to suspend disconnections.” — Energy and Policy Institute

These utilities include electricity, natural gas, and water.

Call everyone you have bills with and see what they can do to help.

Communications

Reach out and touch someone.

Phone and internet are going to be your best friends right now, and not just for Facebook.

Given that we are in the middle of a pandemic (which will most certainly have multiple waves resulting in multiple iterations of lock down), you need to be able to communicate with the outside world.

Let me be clear.

This isn’t a maybe. It’s an absolute must.

Do you need the fastest internet on the planet, able to run the highest 4K streaming first-person-shooter in the world.

No. Not by a long shot.

But you you do need a stable connection with enough bandwidth to handle an interview over Zoom.

Fortunately, many companies are offering coronavirus relief.

• ATT is suspending the termination of wireless, home phone or broadband service.
• Comcast is providing free access to any Xfinity wi-fi hotspot.
• Verizon will waive late fees.

See a longer list of company responses here.

Food

The first rule of saving on food? Stop going to restaurants.

The second rule of saving on food? Stop Going To Restaurants!

Yes, I just invoked Fight Club, but that’s how serious I am.

While so many restaurants have switched to take-out or delivery only, they still cost an arm and a leg (and prices are rising) when you don’t have as much as a finger to afford it.

To combat this, you need to learn to cook. I’m not saying that you need to perfect pheasant under glass, but you do need to master the basics.

• Beef stew
• Pot roast and veggies
• Baked chicken
• Eggs (scrambled, sunny side up, fried, poached, hard-boiled, soft boiled, etc.)
• Po-tay-toes! Boil ’em. Mash ’em. Put ’em in a stew.

While you’re stocking your pantry, forgo the one-day-at-a-time shopping and start buying in bulk. If you’re sheltering-in during your unemployment (as you should be!), then you’ll use up that 5-pound sack of rice from Costco quite quickly.

Lastly, whatever you cook, you need to eat.

Did you make a huge lasagna last night and still have 11 out of 12 servings left? Guess what you’ll be eating for the rest of the week.

Learn to live with culinary repetition.

Transportation

Baby, you can drive my car. Yes, I’m gonna be a star. Baby, you can drive my car. And maybe I’ll love you”

In regular times, transportation would be damn near essential, as you would need to travel to job interviews. However, during this global pandemic and the social distancing we are all practicing, transportation has lost its importance.

Unfortunately, it has not lost its pre-virus cost.

Personal Vehicle

If you bought a new car from the manufacturer and have a loan from their finance arm, then you will probably qualify for one of their delayed payment options. Car financial arms who have these programs include Ford Credit, GM Financial, Honda Financial Services, Hyundai Capital, Nissan Motor Acceptance Corporation, and Toyota Financial Services.

Just how generous are these programs? Take a look.

In one of the most expansive programs, Hyundai Motor America’s Assurance Job Loss Protection will make up to six months of payments for new owners who lose their jobs and have purchased or leased their vehicles between March 14 and April 30, 2020, through Hyundai Capital.

If you don’t have a loan through a manufacturer’s financial department, you should follow this advice.

Reach out to the financial institution that made the car loan or financed the lease even if that lender is not linked to the manufacturer. This will enable the customers to discuss their options, which can include flexible payment arrangements and payment extensions.

From the same article, by reaching out to the leasing company, “[l]essees might be able to arrange deferred lease payments as well.”

U.S. News & World Report has a good overview for those in need of car loan assistance.

Other Options

If you either don’t own a car or can no longer afford your current one, then try some other transportation options that you may have ignored.

These options include,

• Mass transit (maybe not so much during a pandemic)
• Bicycle or other manual modes of transport
• Bumming a ride off of trusted friends and family
• Walking, if locations are nearby

Logistics can get a little tough without your mode of transportation, but there are many options available, even with a virus spreading across the globe.

Health Care

If you don’t have your health, you don’t have anything.

This is especially true in the middle of a global pandemic. Yes, you might only be able to afford catastrophic health insurance right now, but a pandemic is the definition of a catastrophe. So make sure you’ve got something.

Unfortunately, if you were on an employer-sponsored healthcare plan, then you might be royally screwed on this one.

The costs of COBRA are outrageous, and the Obamacare options are just slightly less painful. Plus, heaven forbid you get COVID-19 or some disastrous illness, your deductible and out-of-pocket costs could bankrupt you.

So what can you do?

• If you’re married, you can switch to your spouse’s plan, as spousal job loss is deemed a “qualifying event” for mid-year insurance adjustments. For example, my wife works at a university with fantastic health coverage, but my municipal job offers coverage that wouldn’t break the bank.
• If you’re single, then you could be eligible for Medicaid, or a state-sponsored equivalent. Here in Indiana, we have the Healthy Indiana Plan, colloquially known as HIP 2.0.

There are also alternate health “insurance” plans to explore, such as faith-based health-sharing plans, the most popular of which is Medi-Share. Since these are technically not insurance plans, they do not need to abide by federal insurance requirements (e.g. they may not cover birth control), but they could do in a pinch.

Regardless of which option you choose, read the details carefully. I cover this in more detail in a previous article, Let’s Do the Math: Health Insurance.

Pro Tip: If you were enrolled in a high deductible health plan and contributed to a Health Savings Account, you can take those contributions with you to your new health plan.

Debt

There are four things every person has more of than they know; sins, debt, years, and foes.

Total US household debt just reached $14 trillion in February 2020, so March was a bad time for the coronavirus to spread here. But, it’s here, and now we have to deal with it.

Credit Cards

Credit card companies are among the many who are providing financial relief shortly. If you can’t pay your cards, call your card company! They’ll be happy to work with you.

However, if you can’t afford your payments in the long term, you need to think about how to juggle that debt.

• Transfer your balance to a 0% card. The fee associated with this is normally 3%, and you can get up to 21 months of interest-free credit.
• Negotiate a lower interest rate and reduce your payment. Follow these scripts, and a 30 minute phone call could save you that little bit that is so important right now.

Federal Student Loans

If you are struggling, then you can pause your student loan payments on federal loans through September 30, 2020. No interest will be collected, and your repayment status will not show as being delinquent.

I highly encourage this move, as student loans are such a big financial suck.

Next, you need to get on the lowest repayment plan you can for when you do finally start paying on your loans in October. Most Income-Driven Repayment (IDR) plans to cap their payments at 10% of your discretionary income.

For more reading, check out some of my other articles on student loans.

• The Basic of Public Service Loan Forgiveness
• There Is No Student Loan Crisis
• Overcoming the Shame of Student Loan Debt
• Conquer Your Student Loans
• 6 Quick Wins to Tame Your Student Loans
• Is PSLF Right For Me?
• Don’t Pay Off Your Student Loans

Private Student Loans

The basic advice here is to refinance your loans. With interest rates at historical lows (and that’s no joke), now is a great time. It will lower your monthly payment and lower the total amount paid back.

Also, as with just about every other financial burden on this page, you need to call your loan servicer. They will have the most up to date information on any special assistance they have available beyond the standard refinancing.

Conclusion

The current coronavirus pandemic is a once-in-a-lifetime event, and it will take years or decades for the impact to be completely realized. As such, we need to financially protect ourselves for the coming turmoil, ready to pivot to the next opportunity when it happens.

• Focus on your income first.

You can only cut so much meat before hitting bone, so you need to grow your personal financial pie as much as possible. (Can you tell I’m hungry while writing this?)

• Cut down on expenses second.

This can be hard if you were already living paycheck-to-paycheck, but I bet there’s something that can be cut.

Finally, if you are recently unemployed, I know you’re in a world of hurt right now.

Losing your job really sucks.

My wife and I have been fired, rifted, let go, or otherwise lost our jobs half a dozen times between us due to recessions, mergers, downsizing, and all the other corporate bullshit that happens in the name of maximizing shareholder profit.

Everything feels like shit right now.

But after your grief, take some advice from The Walking Dead.

Kneel down…dig deep…and find it.

The rage.

The hatred.

The loyalty.

It’s in there, now find it.

It’s the only way that this gets done, and this has to get done.

If you want to stop the financial overwhelm and finally gain peace about what’s in your bank account, click here to sign up for my newsletter.

This article is for informational purposes only and should not be considered Financial or Legal Advice. Not all information may be accurate. Consult a financial professional before making any major financial decisions.