When it comes to financial shocks, losing your job is a big one. There's no sugar-coating that. But some of the early moves you make can help create a safety net that helps you get by while you look for your next job.
If the news of layoffs this year seems especially bad, it's not your imagination. General Motors. AT&T. BuzzFeed. Tesla. Verizon. Sears. More companies have been announcing job cuts in recent months, says Andrew Challenger, a vice president at Challenger, Gray & Christmas. In January alone, U.S. employers announced plans to eliminate almost 53,000 jobs, according to the firm's data.
But the overall job market is strong, he says. If you find yourself unexpectedly looking, there are still a lot of opportunities out there—in some fields, there are more open jobs than employers can easily fill. (CNBC has a state-by-state guide here.)
If you are part of a layoff or otherwise lose your job, here are some moves to help you soften the financial blow:
Your now-ex employer may present you with a bunch of different documents to review, such as a resignation letter or (if you're lucky) a severance agreement giving you pay and benefits for a set period.
Put down the pen.
You don't have to—and shouldn't—sign anything right away, says Donna Ballman, an employee advocacy attorney based in Fort Lauderdale.
Among other potential problems, fine print in that paperwork can affect your ability to file for unemployment or get a new job at a company your former employer considers a competitor. And once you've signed, you've agreed to those terms, meaning your ability to negotiate for a better deal goes out the window, she says. (More on that, below.)
Before you sign, at the very least look over the documents yourself at home once that initial shock of losing your job has worn off. Better yet, take the time to loop in a lawyer to decipher the legalese and tell you if there are any red flags.
The American Bar Association pointed us to two resources where you can look for free or low-cost legal help in reviewing such documents: There's FindLegalHelp.org for local legal aid offices and, in some states, ABA Free Legal Answers, which lets you send questions for a lawyer to review online.
Get a sense of what your last paycheck might look like, depending on where you are in the pay cycle. Ask when you can expect that money—it may not be on the next payday, says Ballman.
It's also important to find out how the company handles different benefits, if that isn't laid out in your exit paperwork. For example, state law varies on whether companies have to pay out vacation time you've earned but haven't used. I wrote a guide on CNBC (read it here) on where you might lose money when you leave a job.
Another big question to ask: When does my health coverage end? You're probably paid up until the end of the month. But it's an important detail to know—especially if you have upcoming doctor's appointments, says Janet Stanzak, a Certified Financial Planner in Minneapolis.
Once you know what the company is offering, see if you can negotiate the terms to better fit your needs, says Challenger. (If you're part of a union, it typically does that bargaining on behalf of members. If you've consulted a lawyer, she can help, too.)
"Sometimes it's hard to move that headline number [on pay]," Challenger says. But the company might be willing to reimburse you for unused vacation days, extend your health insurance coverage, or offer resources and training to help you find a new job.
Look to see where you can stretch your dollars. Go over your expenses to see if there's anything you can cut back on, Stanzak says. Earlier this month, we offered tips to help negotiate your bills as you recover from a financial setback—and that's a smart strategy to use here, too.
Then take stock of all your resources, including any severance benefits from your company and savings you might have, she says. Start looking into whether you qualify for unemployment insurance—and if you do, get the ball rolling. That assessment can help you figure out how to make the most of your cash until you land a new job.
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