Adjusting to a Job Loss

Dealing with job loss can be devastating for many people. When it comes to losing your job, there are a lot of different things that you are going to have to consider. Here are a few things to think about when it comes to adjusting to a job loss.

Avoiding Non-Value-Added Activities

When you are suddenly unemployed, you have to look at every activity that you engage in from a different perspective. You need to think about what you are doing that is going to add value to your life from a financial perspective. When you are not working in a traditional environment anymore, you are going to be tempted to do a lot of different things with your time. Even though some things may be more enjoyable, you need to focus on productive activities. For example, you will want to spend a great deal of your time looking for another job. You should get up in the morning and approach your job search as if it were a job in itself. This way, you will be able to treat your job search with the respect that it deserves, and you will find a job more quickly. 

Reduce Expenses

When you lose your job, you are going to be faced with the prospect of living with no regular income. Due to this, you are going to need to reevaluate your current expense situation. Most people have regular expenses that they do not necessarily need in order to live. You need to go over your expenses very carefully and determine what you can cut out. By cutting back on your expenses, you are not going to require as much money to live. When you can cut out as much as possible, you may be able to live in this manner for several months before you run out of money. For example, you can live without cable and a movie subscription service. Keep only what is absolutely necessary, like your water and electric service. You might even consider selling your car if you have a large car payment. This will allow you to eliminate your second-biggest payment, and you can potentially purchase a used car without a payment. If you have two cars, you might even be able to get by with just one car while you are unemployed. 

Tap Savings

Hopefully, if you planned ahead while you were still working, you have some type of savings built up. The standard recommendation is to have 3 to 6 months' worth of savings in an emergency account. When you lose your job, this is the time to tap into your emergency fund. Even though you may want to try to hold onto it, this is when you are going to need it most. Once you get another job, you can always replenish your emergency fund again. When you tap your fund, you want to be as prudent as possible and not waste it on anything along the way.