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Unemployed? 9 Do’s and Don’ts of Getting Laid Off

Unemployed, or “funemployed?” According to unemployment coach Katie DeVito, getting laid off was “the best thing that ever happened to [her].”

After losing her communications position, DeVito sent a tweet to find out how many fellow New Jerseyans were also out of work. With that tweet, she found her calling. Inspired by the outpouring of solidarity, Devito founded NJ Unemployed, a support group for job-seekers in the Garden State. Her organization facilitates advice and support and helps people move forward professionally after the loss of a job.

Today, the site has over 1,000 members. DeVito says being part of this community not only helped her find a new job, but put her fate in perspective. That’s one way not to let a pink slip get you down.

We spoke to several experts to learn some unemployment do’s and don’ts to help get your career back on track. Heed these tips and you, like DeVito, could wind up even happier than you were before.

Don’t panic

The initial loss of a job often makes us lose clarity when looking forward, says Katie Brewer, certified financial planner. But you don’t have to descend into anxiety. There are always options, and the key is to let yourself have the time and space to determine what those are. You can’t move forward without a clear head and an open mind. 

There are a lot of things you can do to channel fear into productivity in this stage. You can make a list of all your relevant professional contacts, so you can send out some emails when you feel more ready. You can research local businesses in your industry, or reach out to former coworkers or clients to secure those relationships. One colleague of mine spent her last hour in her office typing up a letter to HR, stipulating why she deserved three months severance (instead of the standard two weeks). The end result? An extra $15,000 spending money to lower the stress of her job hunt.

Accept your situation

Stave off panic by stepping back and taking stock of your own feelings. “Validate your right to feel miserable,” Dr. Robert L. Leahy, author of  ”The Worry Cure,” advised on NPR. “You’re a human being. You have a right to feel unhappy.” Giving space to your emotions prevents the panic that often comes from suppressing your frustration.

Don’t borrow blindly from your retirement account

When your cash begins to dry up, you may be tempted to turn to your retirement account. But you should think twice before cashing out part of your 401(k) or IRA while unemployed. If you do, you could find yourself with the extra burden of taxes on the funds you withdrew, and a 10% penalty if you crack into your nest egg earlier than planned. Accounting for taxes and fees, tapping into your retirement savings could erode 40-50% of the money you take out.

In addition, if you have to file for bankruptcy down the line, your retirement assets are usually one of the few assets you can keep. Bottom line? Unless these funds are the only thing standing between you and losing everything, try to hold off. After all, that’s what your emergency fund should be for.

Rethink your priorities

Once you’ve established a particular standard of living, it can be tough to adjust it downward. But changing your day-to-day behaviors to meet your needs, not your wants, will be crucial during this difficult time. You can use money management software to tweak your budget to reflect your circumstances.

The good news? You’ll keep these new habits even after you secure a job. That means more savings to help replenish your emergency fund.

Don’t avoid creditors

Personal pride can get in the way of asking for help, but Brewer suggests talking to your creditors right away to explain the situation. Banks and creditors benefit more from “sustainable” customers than they do simply from the assets they collect, a Wells Fargo personal finance representative told us. So they have a vested interest in making sure your life doesn’t spiral out of control. The more your lenders know about your circumstances, the more likely they’ll be to help you out.

Some ways creditors can lend a hand? They might be willing to renegotiate your credit terms or freeze your interest rates, though the terms attached to that will depend on what kind of loan you have (student loanscredit cards, etc.). 

Review your health insurance situation

Losing your job often means losing your health insurance. When you lose your job, you will want to stay on top of your options. If you can be covered under a spouse’s health insurance policy, arrange this as soon as possible, Brewer says. Otherwise, a broker can help you shop around for the best alternatives for your situation.

Brewer says online options such as Esurance are good if you’re familiar with your exact needs and have reviewed the alternatives. But if you need guidance on what’s best for your situation, it may be helpful to talk to a real person. 

Don’t clam up

“One of the biggest mistakes people make is disengaging from others when unemployed,” DeVito says. The shame of job loss, she says, can scare people away from productive interactions. But that only increases the negative pressure in an already stressful situation. Whether you participate in social networking, real-life networking in your industry, volunteering or taking a class, putting yourself out in the world is often the path to new ideas and opportunities. Yes, even when you’d rather retreat and stay home alone.

Blogger Penelope Trunk recommends spending unemployment time creating projects for yourself and executing on them. “It’s good for you mentally,” she says, “because you are doing something meaningful with your time and that will keep your spirits up.” If you’re feeling sorry for yourself, volunteering can also boost your mood by putting your situation in perspective.

Take a balanced view of your situation

Psychologist and mindfulness expert Dr. Melanie Greenberg writes in Psychology Today that she recommends adopting a “mindful” perspective during unemployment, refocusing on the on the positive aspects of your life. That includes being honest with yourself about the causes behind your job loss.

It’s not healthy to beat yourself up because you got laid off in the middle of hard economic times. With an unemployment rate around 5% (and as high as 10% in recent years), getting laid off is dishearteningly common. All the same, if you’ve lost a job more than once, it would behoove you to think seriously about why that might be, or what common threads you can find between those experiences.

Don’t neglect your well-being

“Losing your job is one of the most difficult life experiences that people will go through,” Dr. Leahy told NPR. A Duke University study revealed that the risk of heart attack was significantly higher among the unemployed than those who hadn’t experienced job loss, underscoring the importance of taking care of your physical and emotional health while unemployed.

Watch your stress levels, whether that means taking up meditation, yoga or simply trying to smile more. Dr. Kavitha Chinnaiyan of Beaumont Hospital in Royal Oak, Michigan told WebMD that meditation is one of her favorite ways to reduce stress. “It helps you see your choices and have a clearer perspective of what to do next. Stress may still be around us, but meditation gives us a better ability to cope with it.” Yoga, Chinnaiyan added, can also help reduce stress hormones in the body.

By the same token, don’t let yourself become too busy to exercise, especially because it’s been shown to reduce stress considerably.

All in all, unemployment can be extremely draining, but remember, it’s almost always temporary! By leaning on friends, family and your own inner fortitude, you’ll brave the storm and come out stronger in the end.

Need help adjusting your budget to accommodate unemployment? SuperMoney can help. If you’re looking for a temp job to tide you over until you find the right position for you, compare your best options here.