You’ve worked hard to grow your income, climb out of debt, and improve your financial footing. But now, the worst has happened: You lost your job. Is your hard work doomed to go down the drain, or is there a path forward on your journey to financial freedom, in spite of your job loss?
How healthy are your finances?
Before panicking, assess your finances. While job loss can be devastating when you live paycheck to paycheck, the right preparation makes unemployment easier to weather. A financial coaching session with Coach Connell can help you answer questions like:
- What are your monthly expenses? This includes both recurring fixed expenses like rent or mortgage payments, insurance, and childcare as well as variable expenses like food and gasoline.
- How big is your emergency fund? How many months of expenses can it cover?
- What costs can you cut? Spending less is a key to making ends meet after a job loss, especially if your expenses exceed your emergency fund. As Dave Ramsey suggests, you can start by scaling back entertainment, memberships, and other discretionary spending.
Four ways to earn income while out of work
The best way to stretch an emergency fund is to keep working while unemployed. Staying on the job doesn’t just keep cash flowing after a layoff, either. It also fills gaps in your resume, making it easier to get hired when you finally find the right job. While finding your next career takes time, there are temporary ways to generate income while you job search.
- Freelancing is the best choice for professionals with a marketable skill. While you might associate freelancing with tech-based and creative jobs like graphic design and web development, you can also find freelance opportunities in less niche fields like administrative support on Upwork.
- While gig work offers less earnings potential than freelancing, it’s the fastest way to start earning pocket money after getting laid off. For gigs that are still going strong during the pandemic, look to grocery and restaurant delivery services like Instacart, Shipt, and DoorDash.
- Temp agencies are a good resource when you need temporary work to stay afloat financially. Some staffing agencies even offer benefits like health insurance to temporary workers.
- You can even start your own side business while out of work. While traditional businesses require start-up capital, Shopify asserts that you can start some businesses with little to nothing up front. Pet care and childcare, freelance writing, and e-commerce are a few startups you can launch from scratch in a pinch.
Getting back to work after job loss
Side jobs help you make ends meet while unemployed, but eventually, you’ll need to get back to full-time work. However, you don’t necessarily want to settle for the first job that comes along. What will be most beneficial for you is finding a job that helps you move to the next level in your career journey.
- What does the right position look like for you? Knowing your career goals is the first step in any job search. Analyze what you liked and disliked in your last role and use it to identify positions where you will thrive.
- Pay attention to which industries are hiring right now. By using transferable skills to pivot into a growing field, you can avoid another round of layoffs in the near future.
- Don’t be afraid to use your network. In addition to connecting you with job opportunities, professionals in your existing network can assist your job search with informational interviews and resume reviews.
There’s no question that job loss is a major setback. However, it doesn’t have to be the end of your career or a years-long setback. With a smart financial strategy and a vision for the future, you can get through unemployment and bounce back from job loss stronger than ever.
Guest contribution from Katie Conroy at Advicemine.com.