What to do when you lose your job

March 27, 2020

A few key steps can help you feel more in control.

 

Losing your job without a new position lined up can be a scary scenario — even if you have measures in place to protect your finances. Regardless of your situation, you'll likely need to make some changes. Here are some steps to help ease the burden and take control of your finances after a job loss.

NOTE: If you receive a severance package from your former employer, be sure to review the details closely as it could affect steps listed below.

 

Consider unemployment benefits


If you lost your job through no personal fault (like a company-wide layoff), and you meet your state’s requirements, you may be eligible for unemployment benefits. The purpose of unemployment benefits is to partially replace lost wages, so if you’re eligible, you shouldn’t shy away from applying.

Many states offer online applications that could speed up processing and get you benefits faster. Required information can vary by state, but could include:

  • Social Security number
  • Driver’s license
  • Contact information, including your address
  • Previous employer information
  • Bank account information in states that offer direct deposits of benefits

 

Adjust your budget


While you look to replace your income, see where you can cut back on your budget. Review your expenses and adjust where you can to protect your savings. If you have an emergency fund, you might need to tap into it to help cover your regular expenses after losing your job.

If you're struggling with debt repayment, research if any federal, state or lender relief programs are available, including mortgage relief programs, credit card hardship plans or credit counseling.

 

Get back in the job market


If it’s been years since you searched for a job, this can feel intimidating. The first thing you should do is update your resume and LinkedIn profile. Then, if possible, reach out to your former employer, and ask how they would describe the reason for your departure, as that could come up in future interviews. You can also ask for a letter of recommendation, especially if you lost your job for reasons not related to performance.

Figure out how long you can reasonably take to search for a job, based on your savings and unemployment benefits, as well as your spouse or partner’s income, if you have one. This can help you assess how selective to be when evaluating new opportunities.

 

Manage previous retirement plans


Decide what to do with any employer-sponsored retirement plans associated with your former job. Generally speaking, you have four options for your old 401(k):

  • Leave your money in your former employer’s plan. Note that you may need a minimum account balance to leave a retirement plan in place with a previous employer.
  • Transfer your money into your new employer’s plan.
  • Cash out your earnings.
  • Roll your money into an outside individual retirement account (IRA), such as a robo-advisor platform.
     

There are pros and cons with each option, so you may want to consider talking with a financial professional to provide guidance on how to allocate assets in your account.

 

Keep up with health insurance


Fortunately, the loss of a job doesn’t always mean an immediate loss of health insurance coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires continuation coverage be offered to employees after termination for reasons other than misconduct or a reduction in the number of hours of employment.

COBRA coverage lasts either 18 or 36 months, depending on the qualifying event. Even if you qualify for COBRA coverage, you should consider all your available insurance options. You may be able to find more appropriate or affordable coverage options from another source, such as the Health Insurance Marketplace.

While losing your job can disrupt your daily rhythm, it doesn’t have to disrupt your finances. A proactive approach may lighten your stress and help you feel more in control of your future.

 

Your finances can change unexpectedly for many reasons. Learn how to build up your emergency fund, even on a tight budget.

Related content

What financial advice would you give your younger self?

Stay committed to your goals by creating positive habits

Travel for less: Smart (not cheap) ways to spend less on your next trip

Things to know about the Servicemembers Civil Relief Act

5 things to consider when deciding to take an unplanned trip

How having savings gives you peace of mind

What to do when you lose your job

What’s in your emergency fund?

What you need to know about renting

Dear Money Mentor: How do I set and track financial goals?

9 simple ways to save

Checking and savings smarts: Make your accounts work harder for you

Allowance basics for parents and kids

Steer clear of overdrafts to your checking account

3 awkward situations Zelle can help avoid

A who’s who at your local bank

Finding a side gig to fund your goals

How to choose the right rewards credit card for you

Working with an accountability partner can help you reach your goals

Is it cheaper to build or buy a house

30-day adulting challenge: Financial wellness tasks to complete in a month

First-timer’s guide to savings account alternatives

Friction: How it can help achieve money goals

6 pandemic money habits to keep for the long term

How to Adult: 7 tax terms and concepts you should know

Should you buy now, pay later?

First-time homebuyer’s guide to getting a mortgage

3 tips for saving money easily

An eco friendly debit card with roots in Haiti

How to use your unexpected windfall to reach financial goals

Money management guide to financial independence

5 myths about emergency funds

Earning in the gig economy: Gladys shares her story

Booming in the gig economy: A new chapter leveraging 45 years of experience

By the numbers: The gig economy

A passion for fashion: How this student works the gig economy

Certificates of deposit: How they work to grow your money

What military service taught me about money management

Should I itemize my taxes?

Tips and resources to help in the aftermath of a natural disaster

Tips for working in the gig economy

Common unexpected expenses and three ways to pay for them

How to best handle unexpected expenses

Is it time to get a shared bank account with your partner?

Money Moments: 3 tips for planning an extended leave of absence

Financial gifts can be a valuable – and fun – choice for the holidays

Dear Money Mentor: How do I pick a savings or checking account?

Webinar: Smart habits and behaviors to achieve financial wellness

Managing money as a military spouse during deployment

Practical money tips we've learned from our dads

Myths vs. facts about savings account interest rates

Make holiday gift giving easier in a digital world

5 tips for creating (and sticking to) a holiday budget

What I learned from my mom about money

How compound interest works

Your 4-step guide to financial planning

4 financial considerations before changing jobs

Stay on budget — and on the go — with a mobile banking app

Financial checklist: Preparing for military deployment

U.S. Bank asks: Transitioning out of college life? What’s next?

The banking app you need as a new parent

How to financially prepare for a military PCS

Military finance: How to create a family budget after military service

Here’s how to create a budget for yourself

Understanding guardianship and power of attorney in banking

How to decide when to shop local and when to shop online

How I kicked my online shopping habit and got my spending under control

Personal loans first-timer's guide: 7 questions to ask

How to stay positive when searching for a job: advice from a U.S. Bank goals coach

How to set yourself up for success in your first job

Growing your savings by going on a ‘money hunt’

Multiple accounts can make it easier to follow a monthly budget

Managing your finances in the military

You can take these 18 budgeting tips straight to the bank

Are savings bonds still a thing?

How I did it: Learned to budget as a single mom

What’s your financial IQ? Game-night edition

How to stop living paycheck to paycheck post-pay increase

Which is better: Combining bank accounts before marriage — or after?

Does your savings plan match your lifestyle?

Don’t underestimate the importance of balancing your checking account

Do you and your fiancé have compatible financial goals?

Overdrafts happen: Steps to get you back on track

How to cut mindless spending: real tips from real people

Webinar: Mobile banking tips for smarter and safer online banking

Webinar: 5 myths about emergency funds

Webinar: Common budget mistakes (and how to avoid them)

5 reasons why couples may have separate bank accounts

7 steps: How couples and single parents can prepare for child care costs

Adulting 101: How to make a budget plan

Helpful tips for safe and smart charitable giving

How and when to ask for a raise

How can I help my student manage money?

5 tips for parents opening a bank account for kids

How to manage money in the military: A veteran weighs in

How to save for a wedding

How to save money while helping the environment

It's possible: 7 tips for breaking the spending cycle

Money Moments: 3 smart financial strategies when caring for aging parents

Personal finance for teens can empower your child

Save time and money with automatic bill pay

The mobile app to download before summer vacation

Tips to overcome three common savings hurdles

Webinar: Uncover the cost: Wedding

Webinar: Uncover the cost: International trip

Your guide to starting a job: Resources to help along the way

Building a financial legacy for your family and community

How to increase your savings

U.S. Bank asks: Do you know what an overdraft is?

U.S. Bank asks: Do you know your finances?

Money Moments: 8 dos and don’ts for saving money in your 30s

Money Moments: How to manage your finances after a divorce

Essential financial resources and protections for military families

Bank from home with these digital features

5 tips to use your credit card wisely and steer clear of debt

P2P payments make it easier to split the tab

Real world advice: How parents are teaching their kids about money

Tips to raise financially healthy kids at every age

5 ways to spring clean your finances and save money year-round

How to Adult: 5 ways to track your spending

Webinar: Uncover the cost: Starting a family

How to plan and save for adoption and in vitro fertility treatment costs

What you need to know as the executor of an estate

When your spouse has passed away: A three-month financial checklist

What documents do you need after a loved one dies?

College budgeting: When to save and splurge

6 questions students should ask about checking accounts

Four ways to make a strong resume for your first real job

What applying for store credit card on impulse could mean

Webinar: Mindset Matters: How to practice mindful spending

CancelSave & Close Planning self-care moments that matter (and how to finance them)

Does your side business need a separate bank account?

Start of disclosure content

Investment and insurance products and services including annuities are:
Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank | U.S. Bancorp Investments is the marketing logo for U.S. Bank and its affiliate U.S. Bancorp Investments.

The information provided represents the opinion of U.S. Bank and U.S. Bancorp Investments and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

For U.S. Bank:

U.S. Bank does not offer insurance products but may refer you to an affiliated or third party insurance provider.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.

For U.S. Bancorp Investments:

Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

U.S. Bancorp Investments is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser. To understand how brokerage and investment advisory services and fees differ, the Client Relationship Summary and Regulation Best Interest Disclosure are available for you to review.

Insurance products are available through various affiliated non-bank insurance agencies, which are U.S. Bancorp subsidiaries. Products may not be available in all states. CA Insurance License #0E24641.

Pursuant to the Securities Exchange Act of 1934, U.S. Bancorp Investments must provide clients with certain financial information. The U.S. Bancorp Investments Statement of Financial Condition is available for you to review, print and download.

The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1-800‐289‐9999 or via https://brokercheck.finra.org. An investor brochure describing BrokerCheck is also available through FINRA.

U.S. Bancorp Investments Order Processing Information.