Surviving Job Loss

Kelli Grant, Senior Consumer Reporter for SmartMoney.com, shares some tips on how to survive financially after you lose your job.

If you've been laid off, the first thing you should do is negotiate a severance package with your employer. "The first offer is not necessarily the one you have to go with," says Grant. "If you have a really good record of service, you may be able to negotiate a little bit more." Ensure that certain things are taken into consideration in your severance package, like unused vacation days, sick days and personal days. Some companies will also offer some money to cover training to help you get a new job.

Keep in mind that you're not the only one who's lost their job lately. Be prepared for a long, difficult search for a new job. Grant suggests signing up for unemployment right away because it can take time to process the paperwork. In most cases, you can collect unemployment even if you received a severance package from your company. Don't forget about health insurance either. Be sure you're covered once your current plan runs out; sign up for your spouse's plan, sign up for Cobra under your former employer or look for a cheap policy you can pay for yourself.

Now is the time to take a good look at your finances and preserve what you have. "Start using mint.com - it's a great free site that will help you figure out your budget," says Grant. "Try to put away the credit cards and operate on cash only." Also, if you can help it, don't dip into your 401k. Between taxes and penalties for an early withdrawal, you can easily lose 40% of what you've saved. This hurts your retirement and probably won't help you much during your short-term money crisis either.

To aid you in your job search, be sure to update your resume. However, it's important to polish up your job hunting skills too. Be sure you have a key understanding of what a prospective employer is looking for. "Make sure your resume has those key words, and you really are cautious in that resume to set up... how you're going to do what this employer is looking for faster, better and cheaper," says Grant.

Although losing your job is stressful and sometimes shameful, it's important to let people know that you're out of work. Networking is key. "Getting a new job is all about who you know," says Grant. "Surveys have shown that 50% of people who are looking for a new job end up finding it through someone they have a contact with." Tell everyone you know that you're looking for a new job. Grant suggests creating profiles on www.Facebook.com and www.LinkedIn.com to help get the word out. You never know where your new job may come from. It's important to keep your options open.

For more information on staying afloat after a layoff, as well as additional personal financial advice, click here to visit www.SmartMoney.com.
By Erin Petrun