Financial Help for Laid-Off Workers: What to Do First

Losing your job can feel overwhelming, but having a clear action plan can help you navigate this challenging time with confidence. Whether your layoff was expected or came as a surprise, taking prompt and strategic actions will help you maintain financial stability while transitioning to your next opportunity.

Step 1: Document Everything About Your Separation

Before walking out the door, ensure you have proper documentation of your employment separation. This information will be crucial for benefits applications and potential future legal needs.

Key Documentation to Gather:

• Termination letter or layoff notice with the official reason for separation
• Final pay details, including unused vacation or sick time payouts
• Severance agreement (if applicable) - don't sign immediately without review
• Benefits continuation information (COBRA paperwork)
• Performance reviews and other employment records if accessible

Step 2: File for Unemployment Benefits Immediately

Don't wait to apply for unemployment benefits. In most states, you can file your claim online, and the sooner you apply, the sooner you'll receive benefits. There is typically a one-week waiting period before benefits begin.

What You'll Need to File:

• Social Security number
• Employment history for the past 18 months
• Former employer's information (address, phone number)
• Reason for separation (use exact wording from termination letter)
• Banking information for direct deposit

Remember that unemployment benefits are taxable income, so consider having taxes withheld rather than facing a tax bill later.

Step 3: Secure Your Health Insurance

Healthcare coverage is essential and should be addressed promptly after job loss. You generally have three main options:

Step 4: Create a Financial Triage Plan

Immediately assess your financial situation and create a bare-bones budget that prioritizes essential expenses.

Financial Triage Checklist:

• Cash reserves audit: Calculate how long your savings will last
• Essential expense identification: Housing, food, utilities, insurance
• Debt prioritization: Which payments can be deferred or reduced?
• Income sources inventory: Unemployment, severance, side gigs
• Expense reduction plan: Subscription audits, service downgrades

Step 5: Contact Creditors Proactively

Many people make the mistake of waiting until they miss payments to contact creditors. Being proactive can open up hardship options that protect your credit score.

Creditors to Contact:

• Mortgage lender or landlord: Ask about forbearance or payment plans
• Auto loan provider: Inquire about deferment options
• Credit card companies: Request hardship programs or interest rate reductions
• Student loan servicers: Explore income-driven repayment or deferment
• Utility companies: Ask about budget billing or assistance programs

Step 6: Take Care of Your Mental Health

Job loss is more than a financial challenge—it's an emotional one too. Maintaining your mental well-being is crucial for making good decisions and staying motivated during your job search.

Consider using employee assistance program benefits if they extend past employment, or look into community mental health services that offer sliding scale fees. Many telehealth therapy options also provide affordable initial consultations.