Coping With Job Loss

When 44-year-old Dele lost his job just three weeks before Christmas, his first reaction was one of panic. He had worked in a construction company for 12 years and assumed that he had a stable job for many more years. Dele was his family’s main breadwinner although his wife worked part-time. They had two children under six and the usual rent and other bills to pay.
Job loss ranks as one of life’s most challenging events and it hurts at any point during the year, but during the season of “good will to all men,” it tends to have a much more devastating effect on people when it happens at such time of the year. Some of the issues involved include adjusting your finances, looking for a new job, and coping with the emotional and social impact of your new situation. But even if you failed to anticipate this sudden change in your circumstances, here are some practical steps to take with a clear positive outlook if such happens.
Don’t panic
When you think about all your bills and the monthly expenses you have to face without a steady income, it is easy to despair. Remain calm and do not rush into any major financial decisions whilst you assess your situation. Even if you are eligible, be cautious about dipping into your retirement savings account.
It would be much easier to deal with both financially and emotionally if you’d prepared for the worst by planning ahead with an emergency fund or insurance. The importance of an emergency fund becomes glaring in situations like this. Do you have any savings? How long will it last based on your monthly bills? If you have been able to set aside say six months of your income in a high yield money market account, you will be able to settle some of your bills and relieve some financial pressure while you look for a new job. But if you have always lived from month to month, this may not be an option.

What do your full entitlements amount to?
If you have no savings and is fortunate enough to receive severance pay or other benefits, use these as a bridge to get over the difficult period. Spend carefully, and do not use all of your entitlements to make large payments as you might have to live off that money for what could be an extended period of time. Don’t let such funds lure you into complacency – actively seek a new job.
Develop a new written budget to cover a period of say six months and longer based on your savings and any expected funds. How much will it cost to maintain your family, your home and lifestyle? Keep your family members fully in the picture so they too can adjust their expectations about what you can afford. Cut back on non-essential expenses. Naturally, your priority will be housing, food and utility bills. You will need to restrain yourself from adding on excessive expenses during the Christmas period.
Try to avoid taking on additional debt except for critically important expenses that cannot be delayed. Whilst more debt can temporarily disguise your true financial situation, it will only make things worse. If you are unable to fulfill your financial obligations, such as your mortgage or car loan, approach your lenders; it may be possible to negotiate new terms to adjust your payments for a limited period of time. It is better to approach them yourself rather than to fall behind with your payments. If you default on your home or vehicle loan, your bank will take steps to re-possess your property.
Stay socially connected
Some people feel embarrassed or inadequate after losing their job. Don’t withdraw and let negative feelings stop you from taking important steps; you need your network now more than ever before. Reach out to family, friends, ex-colleagues and your network and spread the word that you are in the job market. Your CV should be carefully updated and circulated. Use holiday social gatherings for networking where you might hear about new openings and connect with people who can help.
With the sheer number of people looking for jobs, you need to cast your net wide, and not just for the same type of job. Be practical and flexible and don’t be fixated on a specific role or job so you can increase your chances of finding work. Consider temporary or part time work that will generate income and give you the time and flexibility to attend job interviews and actively pursue a more permanent position. This might be a time to upgrade your skills, or go back to school which will all add to your resume. Your hobbies, talents and skills and other interests may be converted to a business as they offer serious possibilities for income.
Apart from the financial issues associated with job loss, there are usually emotional and personal aspects that are too often ignored. Whether yours was the only position that was cut, or an entire unit or department, the feelings caused by being laid off are largely the same regardless of the circumstance. Many people experience a loss of self-esteem, a sense of failure and even depression after retrenchment. But it’s important to take your next steps based on clear rational thought, devoid of emotion.
As difficult as this may sound, consider the loss of a job as an opportunity to re-evaluate your future and, potentially change your career or start a new business. Losing your present employment may well be the impetus, just what you need to take a fresh look at your life and re-define your goals. Often, it is times like this that propel people into greater things.