Don't Fall Into An Unemployment Rut
NEW YORK (MarketWatch) -- If you've just lost your job, the decisions you make in the coming days and weeks may be critical to your financial survival. How you organize your time, corral your resources and handle your money can help determine whether this job loss is a temporary setback or a potentially long-term disaster.
MSN Money columnist Liz Pulliam Weston says these five tips will help you find ways to cope, from keeping up your spirits to prioritizing your spending:
Get your head on straight.
Keeping your energy level high and a "realistic sense of optimism" will be essential skills in helping you navigate the road ahead. While family and friends can try to help, what you really need is a job-hunting "board of directors" that can give you advice and encouragement. That means finding a job-search support group; the Web site Job-Hunt (www.job-hunt.org) may be a good place to start looking.
Let people know how to find you.
Your business and professional contacts may have only your work email address and telephone number. As soon as possible, send a short email to all of your contacts letting them know where they can reach you now. Mention the change in job status (you might say something like, "Because of a staff reduction, my last day at XYZ Industries was Oct. 29."). Follow up later with a more personal note to key contacts to let them know you're looking for work.
Stay covered.
If you had health insurance through your job, you should be able to purchase continued coverage under Cobra rules -- but that can be an expensive way to go. Fortunately, you usually have 60 days to sign up under Cobra and the coverage is retroactive, so you don't have to decide right away. If you get another job quickly, you may not need the coverage. If you don't, you may find that a high-deductible individual policy is a better deal.
Apply for unemployment benefits.
Some people worry that applying for unemployment will affect their credit (it won't) or that jobless benefits are some kind of welfare (they're not, because your employer paid into the system on your behalf). The earlier you apply, the earlier you'll get your first check. Most states have a two- or three-week waiting period based on when you file, not when you lost your job. Although the national average unemployment check is only about $270 a week, benefits typically last for 26 weeks, and under some circumstances can be extended for an additional 13 to 20 weeks. But they are available only to workers who lost their jobs through no fault of their own. You generally can't get benefits if you were fired for cause or voluntarily quit your job. If the facts are in dispute, though, go ahead and file -- you can always argue your case.
Get your priorities straight.
List your bills and other spending in order of importance. The items at the bottom should be pretty easy to trim. You should also have an "If Things Really Get Bad" list. Tops on it should be holding on to the roof over your head (the mortgage or rent), keeping the lights on (utilities) and ensuring you have transportation to get to job interviews (car payments and insurance). At the bottom should be your unsecured debts -- credit cards, student loans and other personal debt that paid for stuff that can't be repossessed. Skipping credit-card payments may result in a ding on your credit and phone calls from creditors, but skipping mortgage payments could leave you homeless.
By Marshall Loeb