What You Should Do After Losing a Job: A Step-by-Step Guide

Losing your job can be one of the most difficult times you can face in life. If you've recently been laid off or find yourself out of work, all of us here at American Heritage Credit Union are thinking of you and rooting for you to bounce back. While this time is undoubtedly a difficult one, it's also something you can absolutely rebound from.

While losing a job may feel like the end of the world, it doesn't have to be. In this blog, we have a step-by-step guide you can follow to ensure your affairs are in order and that you can navigate this difficult time with a sense of sureness that you'll get back on your feet.

1. Where to Start Following a Job Loss

Whether it came as a shock or was something you thought may happen, losing a job is never easy. In the first few days following your layoff, take the time you need to process your feelings and emotions. Finding your next job or identifying your next step is a process, and one that won't happen overnight.

In this immediate period, focus on activities and tasks that can take your mind off work and help you find peace and calmness. These may include:

• Spending time with family and friends
• Reading a book
• Exercising or practicing meditation or yoga
• Spending time outdoors in nature

It's crucial that the activities you perform bring you peace of mind and take your mind off finding your next step. You owe it to yourself to protect your mental health before you take on your next gig.

2. Applying for Unemployment

Since it could be some time until you find your next job, you may decide that applying for unemployment is the best next step for you. Unemployment provides you with a stable income for a set amount of time that is determined upon what you earned in a typical time period (usually the year prior).

You can apply for unemployment in Pennsylvania at www.pa.gov. You can file a claim either online, over the phone, or via a video conference call. You will need to share documents and items like a government-issued photo ID, earnings information (via a W2 form), your Social Security number, employer history from the past 18 months, and more.

Once you've filed your initial claim, your eligibility for unemployment will either be confirmed or denied. If you're confirmed, you'll need to file a weekly certification that will allow you to continue receiving unemployment benefits. Your initial claim is active for one year, and you should expect to receive between 18 and 26 weeks of full unemployment benefits if you're deemed eligible.

3. Reviewing Your Monthly Budget

After you've taken some time to process and take care of yourself, you'll want to spend some time reviewing your monthly household budget. This includes taking time to review how much money you spend each month on your mortgage or rent, utilities and bills, subscriptions, groceries, and more.

If you already follow the 50/30/20 budget formula, you have a great starting point. The 50/30/20 budget formula recommends you spend 50% of your monthly income on necessities (housing, groceries, and bills), 30% on entertainment (going to a concert, dining out, memberships, etc.), and 20% on savings. Prioritize your obligations, like housing, groceries, and bills over "nice-to-haves," like a gym membership or a subscription to a streaming service.

Your budget may still appear tight after you make some cuts. If that's the case, contact your landlord or mortgage company and any lenders you're borrowing from (whether for a credit card or other loan), as well as any service providers, and let them know of your current situation. Most lenders and providers offer hardship programs or may offer extension programs, which can help you stay within budget and prevent credit damage.

4. Turning to Your Emergency Fund

Emergency funds are an excellent resource when it comes to any kind of unexpected expense or hardship, including losing a job. An emergency fund is a designated savings account that is exclusively for unexpected expenses or emergencies. How much to have in an emergency fund can vary, but it's recommended to have three to six months' worth of funds in an emergency account.

A high-yield savings account is an excellent option to use as your emergency fund, so long as you can meet the minimum balance requirements. If not, any savings account works better than having no savings at all. With American Heritage Credit Union, you can open a High-Yield Savings Account with a minimum balance of $10,000. You'll earn dividends on your savings, allowing you to earn even more on top of your initial deposit. You can learn more about this account and other savings options here.

Once you've determined your revised monthly budget and are done filing for unemployment, take a look at your emergency fund. Do you have enough in savings to sustain yourself for the next few weeks (or months) until you find your next job? Will you earn enough from unemployment to supplement your monthly budget and savings?

If the answer is yes, you may be in good shape as you start looking for your next job. But if the answer is no, you may need to consider other options. One option is turning to your 401(k) or other retirement plan. However, this should only be used as a last resort if unemployment or trimming back your budget isn't enough.

If you decide you need to make an early withdrawal from your 401(k), you will pay a 10% penalty if you're under the age of 59 and 1/2. This penalty will come into effect when you file your taxes, as the withdrawal is viewed as earned income. Again, this should only be used as a last resort and if no other options will work for you.

5. Tips to Ace Your Job Search

You've processed your emotions, reviewed your budget, and applied for unemployment—so what's next? Once you feel prepared and ready, it's time to start looking for your next job. While this time can be filled with uncertainty, you can also view it as an exciting opportunity. If there's an industry or field you've always hoped to enter, now could be your chance!

Here are some expert tips you can follow when applying for a new job:

• Apply to job postings that interest you and were posted relatively recently.
• Tailor your resume for each unique position; for instance, your resume for a research position could lean into your education, while your resume for a management position could highlight your experience supervising and leading a team.
• If interviewing virtually, test the video and audio capabilities of your device ahead of time.
• Follow-up with the recruiter or hiring manager via email following an interview, reiterating your excitement about the position and eagerness to move forward in the process.
• Consider using a networking tool, such as LinkedIn, to keep you connected and provide you with a steady stream of open positions.

Your job search is sure to be full of ups and downs. There may be positions that excite you in which you hear back nothing. Yet, there could also be an exciting, unexpected opportunity that comes your way. Throughout the whole process, remember to keep your head up and your options open—you've got this!