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Everyone understands that losing a job can be scary and stressful. While your parents or grandparents may have worked for the same company for years (or for their entire career), the simple fact is that long-term job security is scarce in today's job market. However, there are things you can do to protect yourself and to make the transition from one job to another less stressful.
Financial experts agree that it's a good idea to have an emergency fund set aside that contains living expenses for three to six months. If you lose your job suddenly, you'll have a financial cushion for you and your family. If your budget includes an emergency fund, you're on the right track. If not, review your budget for areas where you can cut back on spending. This may be a good idea even when you have an emergency fund because it can help stretch your dollars. For a detailed discussion on budgeting, read the related articles in our Knowledge Center Library.
Other ways you can plan for the possibility of losing your job include:
All of these suggestions will help you quickly begin your job search should you unexpectedly lose your current position. Not only will you be prepared, you'll also be more relaxed knowing you've already completed the first few steps.
Worked and earned money during the past 12 to 18 months
Lost your job due to no fault of your own
Are actively looking for work and can document your search
Unemployment benefits are designed to keep you from experiencing financial hardship while you're looking for a new job that's comparable to the one you lost. Since requirements vary by state, be sure to contact your local employment office for help with the details of filing for unemployment insurance benefits.
If you lose your job, you don't have to worry about your company-paid health insurance. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you are entitled to maintain your health insurance coverage for up to 18 months if you lose your health benefits due to voluntary or involuntary termination, except where the termination was a result of your gross misconduct. You'll keep the same coverage you had while you were employed, if you accept the coverage under COBRA. Keep in mind, your employer won't pick up the tab for your insurance costs when you're no longer employed. You'll be responsible for the payments. Under COBRA, you:
Have 60 days after your termination to accept the coverage
Are covered retroactively to the day after your termination if you pay the premium within 60 days
Must pay the first month's premium within 45 days of accepting the coverage
Are expected to pay monthly premiums to your previous employer
Your COBRA coverage ends when the coverage period is reached, you stop making monthly premium payments, or you get health insurance with a new employer. Check with the Human Resources/Benefits department of your previous job or visit the U.S. Department of Labor's webpage Frequently Asked Questions About COBRA Continuation Health Coverage for more information.
What if you don't qualify for COBRA? The Health Insurance Portability and Accountability Act (HIPAA) guarantees you the right to purchase health insurance coverage if you:
Have exceeded the COBRA coverage period from your previous employer's insurance plan
Are ineligible for coverage under COBRA
Are not eligible for another employer's insurance plan
If you believe you're eligible for health insurance coverage under HIPAA, the Human Resources/Benefits department of your previous employer should be able to help you. You can also search the Internet for more information about getting and keeping health insurance, or read our article on maintaining your health without insurance.
Chances are that you may be living on a reduced paycheck after losing your job. It's important to cut the fat out of your budget during this time. Do what you can take to lower your personal cost of living. Don't try to maintain your current lifestyle. Take a careful and close look at your regular monthly expenses. Can you eliminate any of them, short term, until you get back on your feet? Above all, use your credit cards very cautiously during this time.
Now that you've filed the appropriate paperwork for unemployment insurance and you have your health insurance squared away, it's time to think about finding a new job.
Employment Office – Your local employment office is a good place to start your job search, especially if you're already spending time there making a claim for unemployment insurance. Your state employment office not only helps with claims management, it can also provide you with:
Help in finding a job through a computerized job bank
Internet and fax machine access
Job development training
Skills assessment testing
Networking – As mentioned previously, networking can be a highly successful method for getting a job. Join an organization or association in your career field. Have you got business cards? You never know when you may run into someone who can help you secure a new position. Sites like VistaPrint.com offer inexpensive deals on easy-to-print cards. Add a link to your personal web site or LinkedIn profile in addition to your traditional contact information so people can access your professional information quickly. For more suggestions about networking, see the University of California at Berkeley Career Center article about networking.
What if you don't have a computer? Don't worry, computers with Internet access are available free of charge at almost every public library in the United States. Perhaps you have a laptop but you can't afford expensive broadband Internet service, now that you are unemployed? There are free Internet cafes in many urban areas, and some towns have made free wireless Internet available in public areas such as town squares.
Take note: Not only are Internet search engines useful for you to look for a job, they are also useful to employers who want to find out more information about their candidates for employment. This could have a downside for you, the potential future employee, if there is any unflattering information about you on the Internet. See the Business Week article Netproofing Your Job Search.
Reading the Classifieds – The employment classified sections of major urban newspapers have suffered with the growth of the Internet's popularity, but they are still a good resource for seeing what employment is available. All large newspapers, and even most small papers, have their classified ads online. Some, like the New York Times and the Boston Globe, have partnered with major job search websites.
Temp for Hire – What about working for a temporary agency? At one time, temp agencies only had listings for clerical and warehouse positions. This is no longer true; you can find jobs in most professions. There are contract employment agencies that specialize in various professions, such as computers and information technology, finance, and medicine. The benefits of working for a temporary or contract agency include:
Working while you continue to look for your next job
Receiving regular pay – typically, a weekly paycheck
Possibility of working flexible or part-time hours
Opportunity to try a new field of work
Believe it or not, there may be times when losing your job is in your best interest. Maybe you're burned out from your current job or you've been thinking about changing fields. To reduce stress while you search for a new job, try your best to keep a positive outlook and you may be able to turn a potentially devastating situation into an opportunity for a better life.
Whatever you decide to do bear in mind that losing your job can induce stress, worry and exhaustion. Be prepared to take time to relax and take care of yourself so you can present your best "face" when meeting potential new employers. Meditate, exercise, or engage in other activities that make you feel good. If the job search is getting to be too much for you to deal with on your own and you need to talk to someone in the same situation, research unemployed support groups in your area. Having a community of peers to share with can lift the burden and make the situation easier to deal with.
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