8 Things Not to Do After Losing Your Job

It’s tough any time a person loses a job, but when the whole world is dealing with a coronavirus pandemic fraught with chaos and uncertainty, it adds an extra layer of stress. For the good of your future and your own sanity, take care to make smart choices during unemployment periods. You’ll thank us later.


In no particular order (because all of these are of the utmost importance), here are some tips for things NOT to do after losing a job.

1. Don’t skip paying rent

Rent is one of the very last bills you want to push off by the wayside because doing so can have very inconvenient and far-reaching effects. First, you could wind up getting evicted if you don’t pay your rent. That’s never a good thing. Then, that eviction will follow you forever on your background check, making it hard to find new digs.

So, when job loss strikes, the first thing you should do is sit down and prioritize payments. The major necessities, like food, housing and medical needs, should take priority over anything else. Including your Netflix subscription.

2. Don’t delay filing for unemployment

It can take weeks, sometimes longer, to start getting unemployment payments. You don’t have to head to the office immediately after losing your job, but pretty soon after is a good idea. That way, you’ll at least have that income, plus savings, to fall back on to pay bills.

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3. Don’t forget about health insurance

When it rains it pours. Don’t follow up a job loss with a bankruptcy-inducing illness or accident! Before you leave the office with the cliched cardboard box full of stuff, make sure you fully understand your health insurance situation. For how much longer are you covered? Can you buy temporary insurance from the company to fill the employment gap?

If nothing else, check into getting COBRA (Consolidated Omnibus Budget Reconciliation Act), which is a federal law that entitles employees to continue receiving health care coverage from an employer post layoff (at a cost, of course). Be sure to check against other available options to cover your bases at the least cost possible.

4. Don’t cash out your 401k

Retirement savings are not there for a rainy day — they’re a safety net for when you get older and can’t (or don’t want to) work anymore. Plus, cashing out early will cost you a 10 percent penalty, plus around 25 percent in income taxes, and then you’ll also miss out on compound interest that would have accrued over the years. That’s a big hit to take if you don’t absolutely need the money.

Instead, try to tighten the old belt and reduce expenses as much as possible. With any luck, it’ll be a very temporary situation. Don’t believe us? Check out this 401k Early Distribution Costs Calculator to see what the hypothetical damage would be.

5. Don’t max out credit cards (or get new ones)

Obviously, you’re still going to charge some expenses, but now is not the time for a shopping spree or designer handbag. Consider switching to using the card for essentials only (food, medications, etc) and give yourself a small cash allowance within budget for entertainment. There’s no need to turn short-term unemployment into a long-term credit issue!

6. Don’t make emotional or big lifestyle decisions

You’ve been put through the wringer, so it’s only natural to want to do something that makes you feel better. But delay those marriage and family decisions, spur-of-the-moment moves and other major changes until you’re on more solid emotional and financial ground.

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7. Don’t talk trash

Even if your employer did you way wrong, it’s best to rise above and exit with class. Then keep it that way. It doesn’t take much to earn a reputation as a trash-talker, especially if your industry is well integrated.

So, rather than tick off a list of all the ways you were wronged when the issue comes up, focus on a more neutral, non-emotional reply, like “Downsizing was necessary,” or “That position wasn’t in line with my five-year plan.” It’s hard but worth it.

8. Don’t get too down on yourself

Whatever the circumstances of your dismissal, it’s in the past and should be left there. So, even if your tenure was riddled with mistakes try not to be too hard on yourself. Instead, use it as a growth opportunity.

Also, don’t focus 100 percent of your time on getting a new job. Everyone needs a break now and then, so be sure to take good care of your mental and physical health. Now’s the perfect time to take up a new exercise routine, catch up with old friends or log some extra reading hours. Anything that’s good for the mind, body and soul can only benefit your job search.

Above all else, don’t panic after losing a job

You’re a hard worker with a lot of skills to bring to any table. If you focus on the positives, follow a budget and make smart choices, this whole experience will be in the past before you know it.