7 Tips to Survive Financially After a Job Loss

Last Updated on September 2, 2024 by Rebecca Lake

Losing a job can be devastating mentally and it can also deal a blow to your budget, especially if you’re a one-income family. You might be desperate to find ways to survive financially after a job loss and panicking about how to pay the bills.

I’ve been there and I know how anxious it can make you feel. So today, I’m sharing some tips to help you stay afloat financially when your regular paychecks disappear.

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Can You Survive Financially After a Job Loss?

Yes, you can, even though it might feel overwhelming. Job losses happen for different reasons–your employer needs to cut the budget because sales are slow or your position is consolidated with another role, making your job obsolete. Or you might be let go for an entirely different reason.

The “why” isn’t as important as the “what”, as in, what you do next to take care of your finances and your family while you find a new job.

Layoffs were a regular part of our family’s financial routine when I was still a married mom. My husband worked in an industry that was contract-based so if there was no work contracted, then everyone was laid off.

It was never fun but we always managed to get through it using the tips I’m about to share with you.

7 Money Moves to Make After a Job Loss

This post isn’t just for people who collect a regular paycheck. You may also find some of these tips helpful if you’re self-employed or rely on freelance income to pay the bills.

Ready to learn how to survive financially after a job loss? Let’s go!

1. Review your benefits package

If you worked a regular 9 to 5 job, you may be able to leverage certain employee benefits following a job loss.

For example, you might be able to cash in some of your sick leave or vacation days so that you have cash to cover day-to-day expenses if you were laid off temporarily.

This isn’t ideal, especially if you know you’ll be going back to your job at some point. But those benefits could help bring in much-needed money if you don’t have any other income to fall back on.

If you were let go permanently, you may qualify for a severance package, which can help you get through the transition until you find your next job. Contact your HR department to find out what benefits you might be entitled to and how to claim them.

2. Apply for unemployment

Unemployment benefits exist for a reason–to help you keep up with your bills, or at least some of them when you’ve been laid off from work.

Generally, you’re eligible for unemployment benefits if you’ve lost your job through no fault of your own. That can include being laid off.

Whether you’re eligible for unemployment in your state depends on several factors, including:

How long you worked for your employer
The number of hours worked
Whether you’re receiving any compensation from your employer

You also have to be actively looking for work to receive weekly unemployment benefits. The amount of benefits and the number of weeks you can claim them will depend on where you live.

Learn more about how to file for unemployment in your state.

survive financially after a job loss — How to Survive Financially After a Job Loss

3. Review your budget

When you go from having a consistent income to nothing, it’s all hands on deck when it comes to your budget.

If you haven’t looked at your budget lately, pull it out and start going over the numbers. Make lists as you go:

Bills that you have to pay every month
Necessary living expenses
Expenses you can do without

Your “have to pay” list includes things like your rent or mortgage, car insurance, and electric bill. You could also put debt payments on this list.

Living expenses are necessities like groceries, basic hygiene items, and health care. Expenses you can do without pretty much mean everything else.

For example, you’ll probably need to stop spending money on:

Movies or entertainment
New clothes
Toys for the kids
Books
Electronics or video games
Trips and travel
Gifts
Certain types of personal care, like salon visits

The more you can cut, the better. And remember that you can always add those expenses back to your budget once your income picks up again.

If you need some more tips for saving money, check out these posts next:

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4. Review your debt

If you have debt, whether it’s student loans, car loans, credit cards, or something else, it’s important to stay on top of it following a job loss. The last thing you want is to fall behind on debt payments since that can open the door to credit score damage or even a lawsuit.

Here are some things you might do to manage your debt after a job loss:

Look at your budget to see if you can continue making the minimum payments on your debts.
Contact your credit card companies to ask about a financial hardship program if you need temporary relief from payments.
Consider applying for a forbearance or deferment if you have federal student loans in repayment.
If you have private student loans, talk to your lender about forbearance or deferment options until you get back to work.
If you have a car loan, check with your lender to see if they offer a skip-a-payment option.
Reach out to your mortgage lender to see what options you might have if you’re unable to manage your payments due to extended unemployment.

You could also try to make your debt less expensive. If you’ve got credit cards, for example, you might apply for a 0% APR balance transfer offer to save on interest.

5. Take stock of your assets

Having an emergency savings fund can make a job loss less stressful. Even if your rainy day cushion is relatively small, that’s still money you can count on to pay bills until you start getting a regular paycheck again.

Unemployment and/or severance pay can help your savings go further. You could also consider looking at any investments you might have if you get desperate for cash.

There are pros and cons to taking money out of a retirement account or investment account early. On the pro side, you can get access to cash relatively quickly, which is a relief if your income disappears.

However, you’ll have to pay taxes on money you take out of a 401(k), IRA, or taxable investment account. And not to mention, draining your retirement accounts now means you’ll have a smaller nest egg to retire on later.

There’s one more option if you own a home: get a home equity loan.

Essentially, you borrow against your equity. You get a lump sum of cash that you can use for virtually anything. The catch is that if you don’t pay the loan back, your lender could take your home.

6. Start a side hustle

Before you go digging into your emergency savings or pulling money from your retirement accounts, ask yourself what you can do right now to make money.

There are lots of ways to earn extra income these days, including plenty of ways to make money from home.

If you’re looking for some ways to make quick cash, here are some of my favorite ideas:

Sell things around the house that you don’t need (declutter and make money at the same time!)
Sell unused gift cards for cash
Ask your friends, family members, and neighbors if they have any odd jobs or errands they’d be willing to pay you to do
Offer pet-sitting services or child care in your home
Start an at-home laundry service to make money
Look for freelance writing jobs and get paid to write
Try teaching on Outschool
Make money with a flexible schedule through DoorDash or Instacart
Get paid to do yardwork
Make and sell baked goods or crafts
Earn cash back when you shop with Rakuten
Get paid cash for taking surveys

Any extra money you can make while looking for your next job is a plus. Just remember that side hustle income is taxable if you make more than $600 per year.

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7. Get help if you need it

If a job loss has been devastating financially, you might look to government assistance programs for help. Some of the programs your family may qualify for include:

Medicaid, which provides health insurance at low or no cost to children and families.
The Supplemental Nutrition Assistance Program (SNAP), which can help with buying food.
New moms can apply for help with WIC, which is short for Women, Infants and Children. This program offers vouchers moms can use to buy milk, formula, and basic food items.
If you have school-aged children, you can apply for free or reduced lunch if it’s not already free where you live.
Temporary Assistance for Needy Families (TANF) is another government program you might look into. This one offers financial help with housing, utility bills, child care, and job training.

Here are some other resources you can try for help:

Whether you’re eligible for any of these programs depends largely on your income, household size, and assets. But it’s still worth applying if you’re truly in need.

In addition to government programs, you can also look for help locally. Some of the best ways to get help include local churches, charities, community gardens, and food bank programs.

Finally, don’t count out asking family and friends for help.

You may not want to burden them with your financial problems but if getting laid off from work is causing serious issues, going it alone can only add to your stress. Even if you don’t want to ask for money, you can ask for help in other ways.

For example, you could ask your parents or in-laws to babysit while you or your spouse look for jobs or work on your side hustle. Or you could ask your brother to lend a hand with a DIY home repair so you don’t have to spend money hiring someone else to fix it.

Those are small things but they can be a big help when a layoff is making life challenging.

Final Thoughts: Don’t Let a Job Loss Derail Your Finances

Losing a job is never pleasant but it’s important to stay focused on what you can do to get through the situation. These tips can help you survive financially after a job loss and avoid falling behind on bills.