Published in: Personal Finance | Sept. 24, 2020
By: Maurie Backman
Lost your job during the pandemic? Here's what to do next.
The coronavirus pandemic has wreaked havoc on the U.S. economy, driving millions into unemployment. Getting laid off can be a blow in the best of times, but if it's just happened to you, you're probably reeling. Here are some important steps to take if you've lost your job.
As long as you weren't fired for cause and earned enough money to meet your state's minimum requirements, you should be eligible for unemployment benefits. You'll be able to claim immediately unless you live in a state where severance pay delays benefits. Be sure to file as soon as possible, since it may take a while to process your claim. And if you have trouble getting through online or by phone, be persistent -- a lot of people are filing for unemployment right now and systems are overloaded. But don't give up on submitting that claim.
If you have accrued time off from your employer that you never took, you may be able to get compensated for that time. Similarly, you may be entitled to a severance package from your employer upon termination. If you're laid off, find out what payouts you're entitled to. You should also be prepared to report those payouts when you submit your unemployment claim.
Once your claim is approved, your local unemployment authority will tell you what your weekly benefit will look like. That benefit is unlikely to replace your former paycheck in full.
You'll need to assess your savings and see how close you can get to your former income. Say you used to bring home $800 a week, and you'll now get $600 on unemployment. If you have $3,000 in an emergency fund, you'd be able to supplement that extra $200 a week from your savings for 15 weeks. It's important to understand that and plan accordingly so that you won't run out of money. A smarter bet might be to try to cut down on expenses so you can avoid withdrawing that extra $200 a week unless it's a true emergency.
You may get more leeway with your bills if you can prove that you're unemployed. Before you dig into your savings, talk to your landlord about deferring some rent payments, or look at putting your mortgage into forbearance. Similarly, if you owe money on a credit card, see if your issuer will work with you. You can also ask your utility company, internet provider, and other loan servicers for assistance. Do a rundown of your bills and ask for more flexible payment terms on all of them.
Maybe you don't have money in savings, can only get so much bill-pay relief, and your unemployment benefits don't cover your living expenses. If that's the case, you may need to borrow some money to get through the next few months. And if you're going to borrow, you'll want to do so in as affordable a manner as possible.
Here are what your best options look like, from most to least ideal:
Losing your job at a time like this can be financially devastating, so do your best to keep a clear head as you navigate your next moves. The more strategic you are, the better your chances of surviving this setback with minimal financial damage.
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