Most of us react to being laid off with shock, anger, depression, or even panic. That’s only natural. You know there will be financial and lifestyle changes you should make to help you get by before you are able to find a new job. Still, this is not likely a time when you are able to sort through those easily, and you want to be sure you’ve done all you can to make the best of a bad situation.
First things first: reach out to your closest family and friends and get their support. Most likely, they will help you find the clarity and energy for the next steps you need to tackle, including with your former employer. With their support, you can do so with grace and without burning bridges. Ready? These are the first three things you should focus on to protect your money:
- Wrap up housekeeping with your former employer. Cash in on accrued vacation days and make sure the amount is added to your final paycheck. Look into COBRA benefits if you need them. Understand all your severance benefits, including whether outplacement help is available through the HR department.
- Do not touch your 401(k). You don’t need to do anything with your 401(k) right away, which will help you avoid the temptation to use some of the money before it is transferred safely into a Rollover IRA. This is a detail that can be taken care of later. And, most importantly, don’t borrow money from your 401(k) to help you with the transition – even if you pay it back later (and it is very important that you do) you’ll pay extra fees and you may be hit with an early withdrawal penalty if you fail to repay the loan within a specified period.
- Apply for unemployment. Benefits can take weeks to process, so apply as soon as possible. Most states let you file a claim by phone or online. For state-specific instructions on how to apply for unemployment, go to CareerOneStop.
With these next steps taken care of, you can begin your job search with the confidence that you’ve done all you can in this tough situation.