In an effort to control the spread of COVID-19, the government has mandated citizens to shelter-in-place. The move is forcing businesses to close, resulting in the layoff of millions of workers.
Losing a job can pose a major financial threat. Nearly 80% of American workers live paycheck to paycheck, according to a 2017 report from CareerBuilder. Even when you have a financial safety net, like an emergency fund, job loss can cause significant hardship.
In addition to starting the hunt for a new job, you have to get your finances in order to make up for a reduction of income. Here’s a roundup of helpful resources to help you navigate next steps.
Understanding your immediate financial options
Read through your benefits package or contact human resources to understand your exit options. Some employers offer severance pay based on your salary and length of employment. Some also offer paid-out PTO. But keep in mind accepting severance will limit or delay state unemployment benefits. If you have an employer-sponsored retirement account, understand your rollover options.
What if you were furloughed? A furlough is considered a “temporary” layoff. Those who are furloughed are typically able to eventually return to their job. The most common furlough is during a government shutdown, where nonessential public employees cannot go to work. But private companies can also furlough employees — which is the case for many in the past few weeks. Learn how to manage your money on furlough here.
Applying for unemployment benefits
Apply for benefits as soon as possible. It may take some time for your claim to be processed, especially as many other workers are applying at the same time. The Economic Policy Institute said an estimated 3.4 million workers filed for unemployment last week.
What you need to know about unemployment benefits and coronavirus.
Each state offers different benefits with different requirements to qualify. In most states, eligible workers can receive up to 26 weeks — typically a percentage of your previous income. Apply here.
Need more than just unemployment? There are many local, state and federal programs that can help, including support for starting a business, feeding your family and more. Here’s a list of federal benefits and some additional resources.
Reviewing your health insurance options
In the midst of a pandemic, it’s more important than ever to have health coverage. Employees who have recently laid off can stay on their employer’s health insurance plan for up to 18 months, through COBRA. Other options include joining a spouse or family member’s employer-sponsored plan, shopping on the federal marketplace or applying for Medicaid.
- Everything you need to know about health insurance and coronavirus.
- See if you qualify for Medicaid in your state.
- Learn more about COBRA.
- Compare federal health insurance plans.
Budgeting between jobs
Any good unemployment survival plan needs a budget and reduced spending to get you through hard times. Redraft your budget to reflect the changes to your income and, if you haven’t already, begin cutting back on discretionary expenses. You’ll also want to work on lowering your bills and the cost of necessities. You can reduce your utility usage to keep monthly bills low, look for a cheaper cell phone plan or find more affordable insurance coverage. This is a good time to tap your emergency fund.
- A guide to getting back on your feet.
- Here’s how one reporter budgeted between jobs.
- How to negotiate your monthly bills.
- What to look for in an emergency savings account.
A note: Try not to rack up additional debt on your credit cards. While desperate times call for desperate measures, you don’t want to get yourself further into debt if you can avoid it.
Getting organized for the job hunt
First, don’t wait. Companies typically are looking to interview and hire as soon as possible.
Update your resume and reach out to old contacts to learn what jobs are available. Sign up for local job alerts in your inbox. See one that fits your resume? Apply as soon as possible.
Consider starting a side hustle to make a little extra income while you’re searching for a new job.
But note that this may affect your unemployment benefits, depending on your state.
- Eight side hustles that cost nothing to start.
- Here are the companies hiring right now.
- A guide to conducting a long-distance job search.
It can be a scary and confusing time. Get specific money tips and guides each week in our newsletter — you can sign up here. Have a specific question or concern? Email us email@example.com and we’ll get back to you.
Image: Hugo Barbosa