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What to Do During Unemployment

Unemployed? 9 Dos and Don'ts of Getting Laid Off

So, you got laid off. It happens, and it doesn't have to be the end of the world. Sure, it might feel good to lie on the couch for a week and do nothing, but you eventually have to get things into gear! Our friends at LearnVest are here to share all the dos and don'ts of the unemployment world:

Most of us wouldn't think to associate the words "joblessness" and "fun," but unemployment coach Katie DeVito says she wouldn't have it any other way: "The best thing that ever happened to me was getting laid off."

After the loss of her communications position at a nonprofit, DeVito dispatched a tweet to find out how many fellow New Jerseyans were also out of work. With that tweet, she found her calling: the overwhelming response inspired her to found NJ Unemployed, a support group for job-seekers in the Garden State to facilitate the exchange of stories and advice for moving forward professionally after the loss of a job.

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

We also spoke to experts to find out several key unemployment dos and don'ts when you want to get back on the career track. Heed these tips, and you, like DeVito, could wind up even happier than you were before.

Read on for more

Don't: Panic
The initial loss of a job is stressful, and it often makes us lose our clarity and focus on planning the next steps, says Katie Brewer, a certified financial planner with LearnVest Planning Services. But you don't have to descend into an anxiety spiral. There are always options, and the key is to let yourself have the time and space to determine what those are, Brewer says. You won't be able to move forward without a clear head and an open mind.

This can be as simple as taking the time to gather all of your contacts off of your computer, so you can send a thoughtful email once you get your footing again. One friend, instead of letting anger get the best of her, spent her last hour in the office typing up a letter to HR stipulating why she deserved three months, instead of two weeks, of severance. The end result? An extra $15,000 in her emergency fund while hunting for a new job.

Related: Should You Negotiate a Severance Agreement?

Do: 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." Once you've given your emotions space to exist, you can start to see the big picture more clearly, enabling you to act in ways that will help you and your career.

Don't: Borrow Blindly From Your Retirement Account
When your cash flow begins to dry up, you may be tempted to turn to your retirement account, Brewer says. 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 (for contributions to retirement funds that are pretax) and a 10 percent penalty if you crack into your nest egg before you're 59.5 years old. In general, breaking into your retirement savings early could erode 40 to 50 percent of the money you take out because of taxes and fees.

Not to mention, if you're still unemployed when the tax bill comes around for your withdrawals, this could cause yet more problems. Meanwhile, Brewer says that if you choose to file for bankruptcy down the line, your retirement assets are usually one of the few assets you can keep (depending on state rules). 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.

Do: Rethink Your Priorities
Once you've established a particular standard of living, it can be tough to adjust that downward income, but Brewer says it's crucial to separate your wants from your needs and make the necessary changes to reflect your new financial reality. Tweak your budget in the LearnVest Money Center, where you can edit your (new) monthly income and see how much you have left to spend on each part of your life. Particularly if you're living off your emergency fund, you'll need to think about where you can cut back so you don't eat through your savings so quickly.

For example, after her husband was laid off, Deborah Dunham managed to cut the family's budget by $1,000 a month, and once he found a job again, they still kept many facets of it in place, allowing the family to increase their savings long-term.

Don't: Avoid Creditors
Personal pride can often get in the way of asking for help, especially if you're feeling ashamed, but Brewer suggests talking to your creditors right away to explain that you lost your job. 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, either. 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 loans, credit cards, etc.).

Do: Review Your Health Insurance Situation
Losing your job often means losing your health insurance. While COBRA is an option, Brewer says it can be an expensive one, and private plans may not be appropriate for your situation. 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, then 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. Searching for insurance online is convenient, but if you need guidance on what's best for your situation, then it may be helpful to talk to a real person.

Don't: Clam Up
"One of the biggest mistakes I see people make is not engaging with others when unemployed," DeVito says. The shame of job loss, she says, can scare people away from healthy and productive social interactions. But that only increases the negative pressure on an already stressful situation. Whether you participate in social networking, real-life networking in your industry, volunteering, or taking a class, DeVito says putting yourself out in the world is often the path to new ideas, opportunities, and energy — 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.

Do: 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 positive aspects of your life. That includes self-reflecting and 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 7.6 percent (and as high as 10 percent in recent memory), getting laid off is dishearteningly common, and you don't want to wreck your confidence over something that's out of your control, not least because studies have shown that exuding confidence through body language goes a long way in a job interview. 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. "But having said that, the question really is how long do you want to stay stuck in that position of being angry and anxious?" 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 or yoga or simply trying to smile more. Dr. Kavitha Chinnaiyan of Beaumont Hospital in Royal Oak, MI, 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 and actually help people build stronger relationships. If you're in need of inspiration, here are 10 free workout sites to get you going.

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.

— Shannon Smith

Check out these other smart tips:
How to Brand Yourself When You're Unemployed
Isn't Obamacare Supposed to Keep Health Insurance Costs Down?
Do You Qualify For Unemployment?
Look Workplace-Fabulous For Pennies

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