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Layoffs: 101

Written by Blake Teen on February 10, 2011.

Layoffs happen. I’ve seen even my hardest working friends with degrees from top universities get laid off. And although there are ways to protect your job (like going the extra mile and making yourself indispensable), there is no guarantee that you won’t lose your job at one time or another.

Depressing, I know. But here is the upside to it: a layoff could be your chance to get into a position that’s an even better fit for you, or your chance to try out that career you didn’t have the guts to. The trick is getting back on your feet, protecting your finances and starting to look for your next gig ASAP. If you have been laid off recently, here are a few things you can do:

1. Find out about severance benefits at your work (on the down-low). Knowing what’s usual for your company can help you negotiate a good package. 2. Apply for unemployment. The sooner you get your paperwork in, the sooner you’ll start receiving payments. 3. Slow down your spending. Even if you have a big emergency fund, you’ll probably need to cut back on luxuries and unnecessary spending with less — or nothing — coming in. This calculator can help. 4. Watch that 401(k). If you have a 401(k) plan with your employer, roll it over into a new employer’s plan or roll it into a regular or Roth IRA.

And for more information on getting back on your feet after losing a job, check out our section on job loss at practicalmoneyskills.com.