What to Do if you're About to Lose your Job

Step One: Check up on Your Emergency Fund and Cut Expenses Accordingly.

The best time to do this is long before you are unemployed. Every person- even those who are secure in their positions- should aim to save an amount equal to 3-6 months worth of spending in an emergency fund. (Here's why everyone should have an emergency fund- especially those for whom money is tight!) The specific amount that is best will vary from person to person. If job loss is immanent, look for ways to cut your spending and beef up your emergency fund even more. You want your emergency fund to still be available, because emergencies happen whether you are employed or not. Having savings buys you valuable time, which in turn buys you options.

If you know your job is on the chopping block, cut as much unnecessary spending as possible and make money available. The time to cancel those subscriptions and stop eating out is not when you run out of savings and get desperate.

If you don't have any savings, you might find yourself forced to take the first job offer that comes along, even if it's a crappy one. Savings give you more negotiating room. You might find that employers are willing to sweeten the deal a bit when you're able to walk away from their offers!

Step Two: Decide What's Next

So, what's the plan after exit? A new job that's identical to your old one? Going back to school? Total career change? Having babies and staying home with them? Backpacking in Thailand? Early retirement? Starting your own business? Busking on the subway? Something else?

Your possibilities may be limited by your savings, family situation, and abilities, but you should at least think hard about what you really want before settling for the status quo.

Nearly everyone will get laid off at least once over the course of their career. When this happens, it's the perfect moment to re-assess your situation. Is there something else you can be doing that you like better and meets your values more- while still paying enough to cover your obligations?

It goes without saying that the more savings you have, the more options you have. A great example about this is JL Collins' article about F-U Money. By carefully living on half his income when times were good, he was able to take a break to stay home with his daughter after a very sudden and unexpected job loss.

Step Three: If you're Staying in the Workforce, Don't Just Send out Resumes.

If you're staying in the workforce, it helps to already have a job lined up. As soon as you know that your old job's days are numbered, start sending out resumes and strengthening your network. It's easier to get a new job while you still have your old one.

For people in many industries, especially tech, getting a new job for higher pay is actually easier than than getting a raise at your old company. Companies are so stingy about raises- and employees are so awkward about demanding them- that new hires, fresh out of negotiations, are likely making more than employees who have been there for a while. Losing your job may turn out to be a blessing! Don't be afraid to negotiate!

 Network and be Social

This is hard for introverts like me, but it's so important. Talk to people you know and go meet new ones. Every single good job I've ever had has come from a friend or an acquaintance. Two of the best jobs I've had in my life have come from people I met at art gallery openings- and one wasn't even an art related job! If you went to college, attend the parties that your Alma Mater sponsors, even if your degree was unrelated to your field. People are always willing to look out for folks who went to their college.

Be careful not to spend a lot of money being social. Don't avoid the party, but do avoid the bar tab. Sponsored events are the best!

Never be afraid to tell people that you're looking for work. We all love to hook each other up when we have opportunities. It makes us feel good.

 Spruce up your LinkedIn

I always thought that no one used LinkedIn, so I didn't have one, but when a friend pressured me to make one, I realized how wrong I was. Since creating my LinkedIn, I've received tons of messages from recruiters! I love my clients and running my own business, so I haven't taken anyone up on their offers, but it's a nice boost to the ego for sure- and I'm building connections which will help me if I ever decide to get a regular job.

Even if you're not job hunting, you should keep your LinkedIn up to date.

Check in with your references.

Get a few go-to people who know you from a professional capacity to be your references. These should be people who adored your work for them and are unafraid to talk glowingly about you.

Don't make people your references without checking in with them first.

Don't Burn Bridges

It's so tempting to put your middle finger up to Susan Bad Coworker and tell her all the ways she can stick it, but don't do that. It's not in your best interest. Imagine ten years from now you get a great job offer at a dream salary... and walk in on your first day to find that Susan is your new supervisor.

It's a small world.

Take Care of the Minutia

Before you leave, consider the following:
  • Will you roll over your 401(k)?
  • What will you do for health insurance?
  • Do you lose paid vacation days when you resign? If so, you want to take them ASAP.
  • Do you have an FSA to spend? If so, you lose all that money when you leave. Might as well stock up on FSA-approved items while you can.

File for Unemployment

The specifics of filing for unemployment will vary state by state- your state's .gov website is a good place to start digging for information. File for unemployment in the state where you worked. After you file your claim, it usually takes two to three weeks to get your first unemployment check.

 Stay Positive, Stay Active.

Like a lot of people, I get depressed when I'm unemployed. Maybe it's the structure of having a job, or the feeling of purpose I derive from work- but when I don't have it, I feel lost and sluggish.

There are other places to get a sense of purpose in the meantime. Volunteering, being active in your spiritual or cause-based community, using your new free time to take care of family and friends- these are just a few ways to maintain a sense of purpose when you're unemployed. You might even meet someone who wants to hire you!

Don't be afraid to seek mental health care if unemployment brings on depression. This is treatable and nothing to be ashamed of. If you have trouble making ends meet, don't be ashamed to seek out state programs like medicaid and food stamps to bridge the gap until you land your next job. That's what those programs as there for!

Job or no job, you're still in control of your own destiny, so never give up.


  1. i think may be i am just being paranoid but i got the feeling that i might lose my job for some reasons. this post not only helps to deal with it but also calms my nerves

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