Chapter 17
Dealing With Losing Your Job

In This Chapter
  • Reacting to losing a job
  • How your job and your personal identity are related
  • Working to preserve relationships
  • Financial implications of job loss
  • Smart strategies while you’re unemployed
  • Knowing you’re not alone

Nobody likes to think about losing his or her job. It’s stressful. It can be depressing. It can shake the very foundations of who we see ourselves to be. Studies have shown that someone who loses a job often experiences a range of emotion similar to those of a person who has learned that he or she has a terminal illness, or who is grieving the loss of a loved one.

The emotions and reactions aren’t as intense, of course, but one who loses a job may experience feelings of denial, anger, depression, and finally, acceptance.

Not everyone experiences this range of emotions, but losing a job can trigger an intense reaction, to be sure. In this chapter, we’ll take a look at why our jobs are so important to us, and what you can do if you find yourself in the jobless zone. Whether or not you had any idea that your job would end, you’re bound to be at loose ends for a period of time when you’re first unemployed.

Downsizing and Other Dirty Words

We don’t, fortunately, hear as much today about downsizing as we did in the past couple of decades, but, rest assured, it still happens.

About 10 million jobs were lost to downsizing between 1980 and 2000, and downsizing didn’t stop at the turn of the century. Downsizing typically occurs in companies that hope to cut costs and improve performance—often to please their shareholders. They often leave behind them a trail of damaged and demoralized former employees.

Downsizing is a current term, but it’s not much different than layoffs, job elimination, managed reductions, or good, old-fashioned firing. And if it happens to you, chances are that you’ll have a difficult time dealing with it. So why is it that our jobs are so important to us? Sure, we get paid for doing our jobs, but there are a lot of ways to make money.

The psychology of how we identify with our jobs is fascinating and may shed some light as to why many people are so traumatized when their jobs end.

You Job and Your Identity

Think about meeting somebody for the first time at a cocktail party, your church, a school function, or a friend’s house.

You strike up a conversation, introducing yourself and perhaps your spouse or partner. You might talk about the party or other event, move on to the weather, and ask about each other’s kids or other family members.

Before long, however, it’s almost a sure bet that one or the other will ask, “So what kind of work are you in?” or “What do you do?” Our jobs give us a sense of identity. To go from having a job to not having one can leave a person not knowing where he stands.

Imagine that you teach history at a small college in New England. Your entire life may well be tied to the life of that college. The other faculty members and their families are your friends—sometimes they seem more like family. Your social life revolves around concerts, plays, parties, and other events associated with the school. Your kids go, or plan to go to school there, and your spouse volunteers at the child-care center. You even attend services at the church on campus.

One day, you learn that enrollment has dropped enough so that a position in the history department must be eliminated. And, guess what? Being the newest professor, you’re out of there. You not only experience the loss of a job, but many other losses, as well.

Your relationships with friends still employed at the college may change. You may not feel like attending plays and concerts there for a while, which will affect your social life. If your kids were going there tuition-free because you were a faculty member, you may have to rethink college plans. Suddenly, you’re likely to feel as though you’ve been cut adrift. No wonder you feel angry and depressed.

A job loss can, in a minute or two, make a person stop feeling like a breadwinner and start feeling like a burden. Job loss tends to be especially difficult for a person who is the primary, or sole, earner for a family. When not dealt with positively, job loss can cause feelings of isolation, fear, anger, loss of status, worthlessness, and depression. You may feel ashamed to tell your family and friends that you’ve lost your job. You might feel as though you’re no longer a respected member of the community.

Try to be frank and honest about your circumstances, and don’t make excuses for what happened. Remember that many other people—probably some of your own friends and family members—also have lost jobs due to downsizing or other circumstances. Look to the people who care about you for support and guidance. Who knows? Maybe one of them will have a hot tip on a job opening.

Bridges Aren’t Built to Be Burned

If you lose your job, at all costs resist the temptation to “get even” on your way out by telling off your boss, or your coworkers, or your secretary. Don’t kick the trash can, steal a stapler, or do anything to mess up the computers. Don’t whine or pout, or tell lies about somebody else to make yourself look better.

Getting downsized, laid off, fired, or whatever you want to call it, can be extremely upsetting and really hard on the ego. And it can be very tempting to retaliate against the person or people you feel are responsible. A sizeable percentage of violent acts in the workplace are by former employees who are angry at being fired.

Life, however, seldom turns out as we anticipate. Many people have found their way back to companies at which they were previously employed, and many more would have liked to but couldn’t because they’d destroyed their bridges.

[image] Don’t Go There
If you feel severely depressed after losing your job or extremely angry for longer than seems normal, don’t hesitate to get help. We can’t always handle problems on our own, and there’s no shame in admitting that you’re having trouble coping. Not seeking help can result in serious health and emotional problems.

If you’re fired, you’re by all means entitled to ask the appropriate person why it happened. You should know for your own peace of mind the reason for your termination. When you talk about your change in job status, be as polite and respectful as possible, even if you’re seething inside. Feel free to express your opinions and speak up on your own behalf, but don’t say anything for which you’ll be sorry later.

If possible, sit down for 15 minutes or so and jot down your questions or the points you want to make when you speak to your boss. Remaining as calm as possible, and having an idea of what you’ll say will give you a real advantage.

Practical Concerns When You’re Not Working

Along with the emotional issues you’ll deal with if you lose your job, there will be some real practical concerns, as well. Will you be able to meet all your expenses? What will happen when your unemployment pay runs out? How will you find another job?

A joint poll in February 2001 by USA Today, CNN, and Gallup showed that more than 30 percent of workers could last only one month without hitting severe financial trouble. An additional 15 percent said they could last only one week.

There’s no question that unemployment raises a whole raft of concerns—many of them related to finances.

In this section, we’ll examine those concerns and others and give you some tips on managing your finances while you’re out of work.

How Not to Deplete Your Savings Account

When you lose your job, life becomes a bit uncertain. Even if you got a nice severance package and will be collecting unemployment compensation pay, you’ll need to rethink your financial situation.

[image] Don’t Go There
Don’t succumb to the temptation to use credit cards in order to maintain the lifestyle you had while you were working and getting a regular paycheck. You can pull off the credit thing for a while, but it will catch up with you big time—guaranteed.

If you have considerably less money coming in during unemployment than you did while you were working, you’ll need to tighten the proverbial belt and keep a close watch on your spending.

One of the first things you’ll need to do is file for unemployment benefits. Be sure to do this as soon as possible after losing your job. You won’t receive any benefits for one week after being laid off, but if you don’t go within the first week, you’ll lose more benefits. You can file for unemployment benefits for up to 26 weeks within a one-year period. Most unemployment benefits will equal about 50 percent of the salary you had been earning.

If you have an emergency fund, and hopefully you do, you can use that money to tide you over until you get reorganized. That’s the purpose of such a fund, and you can congratulate yourself for having had the financial forethought to establish one. Don’t consider the fund to be income, but know that it’s there to fall back on when you run short. Review Chapter 2, “Figuring Out Where You Are in Life,” for more information about emergency funds.

Even with an emergency fund, however, you’ll want to limit spending until you’re more certain about what’s going on. As discussed in Chapter 6, “The Big, Expensive Parent Trap,” most people find variable expenses easier to cut than nonvariable ones. Variable, discretionary expenses are especially prime candidates for cuts.

Just as a reminder, your nonvariable expenses, sometimes called fixed expenses, are those such as mortgage, car, and insurance payments. Those expenses also are nondiscretionary expenses, which means they’re not optional. Your health club fee is a nonvariable expense because you pay the same amount every month. It’s not necessary, however, so it’s called a discretionary expense.

Variable expenses include the electric bill, your food costs, and the amount of money you spend on clothing. They’re called variable, obviously, because the amount you’ll spend varies. The electric bill and food costs are nondiscretionary expenses, because you’ve got to pay for electricity and you’ve got to buy food. Clothing costs, however, are discretionary expenses.

[image] Money Morsel
A great idea, if you can work it out, is to trade services. If you teach piano lessons, for instance, and a friend is a hairdresser, offer to give her son every third piano lesson for free in exchange for haircuts.

Take a minute to identify areas in which you can cut expenses. If you’re like most people and eat out often, you can save a bundle by cutting out restaurants—including fast food. It’s a lot less expensive to cook and eat at home. Clothing is another obvious area in which you can cut back. Conserve electricity and water, avoid using your car when you don’t have to, and make coffee at home instead of driving into Starbucks when you pass by. Drop the health club and run on the track at your local high school instead. Or dig out that stationary bike from the basement and climb on.

[image] Money Morsel
If you get a severance settlement when you lose your job, it’s a good idea to put as much of it away as you can. You can’t know how long you’ll be out of work, and chances are you’ll be very glad to have that money as a backup a little further down the road.

There are many ways in which all of us could save money. We know a family that actually saved money when the husband got laid off at work. They lived on his unemployment payments while they systematically cleaned out every cupboard and closet in the house. They cleared out everything they didn’t want or use, and sold it, either at yard sales or to consignment shops. Antiques went to a local auction center. Their cellar and attic were cleaned out, and they made some extra cash to help tide them over until the husband found another job.

Is Everybody Covered?

When we’re employed, we tend to take insurance that our employers provide for granted. Only when we no longer have the coverage do we fully appreciate it.

If you lose your job, your employer should give you information about how to continue your health coverage through a program called COBRA. COBRA allows you to extend your health care coverage under your former employer’s plan after you leave your job. Unfortunately, you’ll have to pay for the insurance, but at least you’ll be covered.

Be sure to check with the human resources department of your company about continuing coverage for you and your dependents.

Many people get life and disability insurances through their employers, in addition to health coverage. If that’s the case for you, you may be able to deal directly with your employer’s insurance carrier to extend that coverage. If not, you should talk with an insurance agent about getting life and disability coverage through another carrier.

[image] Adding It Up
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. It requires most employers with group health plans to allow terminated employees the opportunity to extend their coverage. To learn more about this program, check out on the Internet.

Financial Strategy Planning

It’s nice to think you’ll find another job within a week or so of losing one, and perhaps you will. Chances are, however, it will take longer than that—maybe much longer—to find a job you want.

For that reason, it’s important to take some time to strategize your finances. The first thing you should do is to realistically assess your situation.

Figure out exactly what income your family has. This shouldn’t include an emergency fund or severance pay that you’ve put away but may include the following:

  • Unemployment compensation
  • Income of spouse/children
  • Interest from saving accounts
  • Union assistance
  • Dividends from investments
  • Income tax refunds

Next, make a list of all the bills you’re responsible for paying, and compare that balance against your income. We’ve already discussed the areas in which it may be easiest for you to cut expenses and save money, so be sure to consider those. If you think you’re going to have trouble making your required payments, however, consider these strategies.

  • If you have a mortgage, you may be able to renegotiate payments so that you’ll pay less each month until your regular income resumes. Of course, this will extend the overall life of your mortgage but perhaps can help you to avoid a current problem.
  • If you’re paying rent and think you’re going to have a problem making the payments, talk to the landlord before you run out of money. People are more likely to be sympathetic if you explain your situation, rather than simply not paying what you owe.
  • Discontinue direct payment of bills from your checking account. While this is normally a convenient service, discontinuing it at this time will allow you more flexibility in deciding which bills to pay at specific times.
  • Discontinue automatic payments into investment accounts, college savings, or whatever. You’ll need to meet your bills first.
  • Check the yellow or blue pages of your phone book to see if there’s a consumer counseling agency in your area. These agencies often offer their services for free or at a nominal cost.
  • Check with the utility agencies with which you deal about a budget plan that may lower your monthly payments.
  • If you have a cash value life insurance policy, you may be able to borrow money from it, if necessary. Ask your insurance agent for more information.

[image] Money Morsel
People over 40 are protected from employment discrimination based on age by the Age Discrimination in Employment Act. If you feel that you were fired, or are not being hired, because of your age, you can contact a lawyer or find out more about the act from the U.S. Equal Employment Opportunity Commission. It’s on the Internet at

Go Figure
Being laid off may seem like a tragedy when it first happens, but many people find it turns out to be a positive occurrence in the long run. To get a different perspective on being laid off, read Congratulations! You’ve Been Fired, by Emily Koltnow.

  • Consider taking a temporary job in order to generate more income. Remember that even if you’re getting unemployment pay, you can still earn up to 40 percent of your unemployment benefits without penalty. If you’re earning $300 a week in unemployment, you can earn up to $120 in salary.

If you plan carefully, chances are you’ll pull through a period of unemployment relatively unscathed. Don’t think, however, that you can continue to live in the same lifestyle that you did while you were working.

Resources to Help You

If you’re having trouble during a period of unemployment, there are numerous resources to which you can turn for assistance.

Check to see if your community has a career services center that may offer free counseling and facilities. Career centers, both private and publicly funded, will help you to write or update a resume, identify potential jobs, and contact potential employers. You also might consider a career coach, who will personally work with you to find another job.

And, don’t overlook online career resources. They are numerous, with many concentrating on specific job areas such as science, medical, sports, or nonprofit organizations. For some reassurance about finding a new job, read “Job jitters? Stay calm. Hiring still outstrips firing” on the U.S. News and World Report Web site at

Remember that losing your job isn’t the end of the world, and it shouldn’t be a source of shame or extreme anxiety. Many people have said in hindsight that losing a particular job was the best thing that ever happened because it gave them a chance to rethink where they were in life and what they wanted.

The Least You Need to Know
  • A typical person may experience feelings of denial, anger, depression, and eventually, acceptance upon losing a job.
  • Many people link their job to their identity, which can make losing the job very traumatic and difficult on an emotional level.
  • Don’t burn bridges with your former employer, no matter how much you might be tempted to do so.
  • If you lose your job, you’ll need to assess your financial situation and plan for how you’ll cope with a reduced income.
  • You should employ all necessary strategies to insure your finances remain on track during the period in which you’re unemployed.
  • There are many resources to assist people who are unemployed and looking for another job.
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