If you’ve lost your job during this sudden, severe economic downturn, you’re not alone. Tens of millions of others are in a similar boat, having joined the newly unemployed this spring. And while the experience is no doubt stressful, there are steps you can take to shore up your finances and improve your career prospects during this challenging time. Here’s what to do.
1
Acknowledge Your Emotions
You may feel depressed or hurt about losing your job, and anxious or stressed about the future. These feelings are normal, research shows—and you should not ignore them. Instead, discuss these feelings with trusted friends and family or consult with a social worker or psychologist if you need to. And give yourself a much-needed break: We’re living through a bewildering time, and you’re not alone in this experience. Once you acknowledge your feelings, you can work on getting back on track on the financial and job fronts.
2
Apply for Unemployment Benefits
Although the jobless numbers are unprecedented, so are the available benefits. Thanks in part to the federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted March 27, more benefits are available for more people for a longer period. Here are some highlights from the U.S. Department of Labor:
● Unemployment benefits are available for up to 39 weeks, up from the usual 26 weeks.
● Unemployed workers receive an additional $600 weekly from March 30 through July 31.
● Eligibility for benefits has been expanded to include independent contractors, freelancers, gig workers and others. These include people who lost full-time positions and are now seeking part-time work, those who were previously employed but are now unable to work because they’re caring for children or other dependents, and those who quit a job due to risk of exposure to the coronavirus.
To apply for benefits, visit your state’s unemployment website and have the following information handy:
● Your name, Social Security number and mailing address.
● The names, addresses and phone numbers of all employers you worked for during the past 18 months.
● The first and last dates that you worked for each company.
Because of the volume of unemployment claims, it may take weeks before you receive benefits. So don’t delay your application.
3
Seek Additional Relief
The CARES Act also offers plenty of financial help—most notably the $1,200 stimulus check the government issued to individuals with $75,000 or less in adjusted gross income. (If you didn’t get the payment and think you are eligible, the IRS has a site where you can check on the status.)
Relief is also available for many business owners, veterans and student loan borrowers:
● Businesses can get loans, loan payment relief and tax help, including in the following ways:
○ The Small Business Administration (SBA) is offering loans of up to $10 million through their Payment Protection Program.
○ Small businesses that are struggling to repay previously issued SBA loans have relief for up to six months.
○ All businesses that are closed or distressed because of COVID-19 may receive a fully refundable tax credit to help them keep workers on their payroll. The credit is worth 50% of qualifying wages paid, up to $10,000 in total.
● Veterans may get improved healthcare, including free telehealth consultations, as the CARES Act set aside nearly $20 billion for veterans’ health needs.
● Those with federal student loans can defer payments penalty-free until September 30.
4
Get Your Finances in Order.
Many of you may be earning less now than when you were employed, so now is the time to review your personal finances. First, look at what you are spending each month on everything from your necessities (such as your rent or mortgage, utilities, auto loans, health insurance and groceries) to your discretionary expenses like Netflix or cable subscriptions.
Start by cutting out or reducing your discretionary expenses as much as you can. Experts say that you want to keep those items to a maximum of about one-third of your budget. No doubt, some of these items might already be on hold or vastly reduced. Your gym, for example, may have suspended operations. But other discretionary expenses may have shifted: While you might be saving on dinners out, you’re spending money on takeout to support local restaurants. Unfortunately, when your finances are tight, it can be hard to justify even well-meaning costs like this.
Still need more money in your budget? Look at your fixed expenses and see where you might make cuts: Could you lower your grocery bill by eating less meat or cut that utility bill by using the heating or air conditioning less? And if you fear being unemployed for a long time, examine your most expensive fixed costs. Could you refinance your mortgage, or if you rent, move to a cheaper place? Run the numbers and see.
If you can, build a cash reserve. In uncertain times, it’s important to have enough cash on hand to ride out the storm—experts recommend at least three to six months of living expenses. So, if you can save on suspended gym memberships or lower auto-related expenses and restaurant meals, stash away that cash.
5
Invest in Your Future
Networking may be more important now than ever. Reach out to former colleagues and others in your network to let them know you’re looking for work and eager to try a new opportunity. Make sure your resume and LinkedIn profiles are up to date so contacts can see your experience and skills. Check your local library’s website, as many libraries offer free resume and cover letter help via email to low-wage and unemployed workers.
What’s more, now is a great time to take a class or learn a new skill that could help your career. You may also want to consult a career coach, as these challenging times could be an opportunity for you to consider a new or revitalized career direction.
Allan Kunigis is a freelance financial writer based in Shelburne, VT. He has written about personal finance for more than two decades.