Steps to Take if You Lose Your Job and You’re Now Unemployed

Many of us live in fear of possibly losing a job.

After all, the job is what provides income stability in the household, and is often the source of benefits, like health insurance, for your family.  Without a job, you are on the hook for a number of these costs, and may find it difficult to make ends meet.

Losing your job doesn’t have to be the end of the line, however.

There are steps you can take to alleviate the situation, as well as ways to make unemployment an opportunity.

Before you panic into doing something unwise, take a deep breath, step back, and consider the following actions if you lost your job:

Apply for Unemployment Benefits

The very first thing you should do after you are laid off is to apply for unemployment benefits.

You want to get the paperwork moving as soon as you can so that you can start collecting as quickly as possible.  While your unemployment benefits aren’t likely to completely replace your salary, they can still be helpful.  They reduce your need to rely on an emergency fund, at at least provide some income.

Realize, though, that you probably have to make an effort to find a new job if you want to keep collecting the benefits, as well as meet other requirements.  Make sure you understand the eligibility requirements, and then get the ball rolling ASAP.

Assess Your Budget

lost job and need work

Don’t despair. Take these steps if you’ve lost your job.

Now that you have the ball rolling on your unemployment benefits, it’s time to assess your budget.

The first thing you need to do is understand where your money is going.  Prioritize your bills, and consider which items can be cut from your budget.  When push comes to shove, you probably don’t need to keep paying for cable, and it probably doesn’t make sense to eat out every single week.

Look for ways to cut back now, before the situation becomes desperate.

You should also recognize which bills you can let slide.  If you have to make a choice between paying your mortgage and making credit card payments, it makes sense to focus on the mortgage if you want to keep your home.  Hopefully, though, it won’t come to that.  But it doesn’t hurt to be prepared.

Recognize your assets.

Look at your emergency fund, and other assets.  You may need to draw on them later.  Consider the order that you use.  Start with an income that you have from a part-time job, and then add the emergency fund.  Consider selling investments and using your retirement accounts later on, if you have to.

Contact Creditors

You might need to contact a few creditors in order to make other arrangements to repay your obligations.

Be up front about your situation.  In many cases, you can arrange a new repayment plan.

Student loans can often be deferred because of hardship, and many utility companies offer programs for those suffering from financial hardship.

Find out what’s available to you, and apply for programs that can help you meet your obligations — or at least stave off problems associated with not paying.

Look for Other Income Sources

While you are trying to find another job, look for other income sources.

Perhaps you need to take on temporary work, or a part-time job.  You might consider the job “beneath” you, but any job is better than no job, particularly if your state has a fairly low cap on unemployment benefits.  Consider doing odd jobs, as well as finding other ways to make money.

Many people find that losing a job is the perfect opportunity to start a business.

You can become self-employed, working for yourself; you don’t have to worry about “the man” firing you, and being in control of your financial destiny.  Your unemployment benefits, emergency fund, and income from odd jobs might be able to help you get by while you start a business.  Your life partner might even be willing to go back to work to help with household income.

You will also need to replace employment benefits.

You will have to find ways to pay for self-employed health insurance, but that is possible when you shop around. Find ways to build up diverse income streams so that, even if you do go back to work in a traditional job, you never have to rely on a single income source for your financial well being again.

Develop New Skills

Finally, now is a great time to develop new skills.

You can learn new things while you work part-time or start a side business.  Upgrading your skills can help you become more marketable during your job search, and it provides a solid reason behind your sint as an unemployed person.

Filling gaps on your resume is important. Even if you take an internship, or volunteer for a while, you can show that you are using your time wisely, and that you have been developing valuable skills and experience.


Perhaps the most important thing is to stay busy.  It’s easy to become discouraged when you lose your job.  However, you need to stay motivated, and have a plan for getting back on your feet if you expect to survive financially.

What other steps should someone who lost their job take?

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Published or updated July 25, 2012.


  1. The other step to take is to look into community resources beyond unemployment benefits. It is true that jobless benefits are just enough income to keep people off food stamps; but the resources I often recommend for working class or median income families are more along the lines of “special circumstances” programs that are not income-sensitive. Examples from my city of Monroe MI include: children’s book program for preschoolers, and rides for veterans to get to medical appointments out of town. We also have a lot of first-come, first-served resources such as grocery and personal care product giveaways. How do you find out about those programs? Ask your library if they host or know of a community resource site; and call the 211 hotline or similar hotline that are hosted by many United Way agencies. Then as you work with one program or social worker, ask if they know of other resources you could apply for and tap into.

  2. I’d also add to reach out to your network. I had a acquaintance who did this and I was able to have another ffriend set her up with a new job within a couple weeks of her losing her original job. Your network is a powerful tool so don’t forget it!

  3. I would also add to make “strengths inventory.” Make a list of things that you are really good at and look for positions where you can use those strengths. Employers want people who are good at what they do, so it makes sense to find a career that fits this.

  4. Nunzio Bruno says:

    Solid list of to-do’s if this happens. It’s not easy but staying busy really keeps you sharp but also puts you in a situation where opportunities for new income sources can be fostered. I love networking but it’s not just for business owners – everyone should be willing to get in and mingle. Especially if you can offer value to those groups that don’t include you being a new customer for them.

  5. You must remember that nobody owes you anything in this world. If you lose your job, the only solution is to hustle your butt off until you find a new one.

    A friend of mine is a director at a pretty serious company. The other day he was approached by a 35 year old, begging him for work. He asked this person what they had done for the past six months. They had no response. He was upset that they couldn’t even find a part-time job to help cover expenses.

  6. When one loses a job, the first instinct is to look for another job. However, instead of looking for an employer who will offer you a job, why not create a job for yourself? Start your own business. Learn new skills or utilize your talent.

  7. Useful topic to write about! It’s definitely a good tip to apply for unemployment benefits ASAP. The paperwork, as you say, can take a while to process and you don’t want to miss out on weeks or even months worth of cash. It won’t be loads, but when you’re unemployed it can make a huge difference. Also cutting costs like premium satellite TV packages which you might have not thought much of when you were employed are a must.

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