The First Things to Do if You Lose Your Job

ST. LOUIS (KSDK) -- The announcement that Enterprise Rent-a-Car in St. Louis was cutting jobs was a shock to the local business community last month. The local business giant had never before cut jobs. But beyond the surprise outside the company was the stark realization for those workers: that everything was changing.

The moment the cuts were announced, a proverbial clock began ticking for the 200 newly unemployed. Their immediate source of income was now gone, yet every expense they had before being fired still existed.

So what should they do first? It's a question many probably have not asked of ourselves, but maybe should.

Brenda Mahr, CEO of the Employment Connection in St. Louis, had several suggestions on coping with losing one's job. Employment Connection provides free employment services to persons who have difficulty finding and maintaining employment and to St. Louis area businesses who are seeking qualified job applicants.

"What they should do, which is the most difficult thing in the world, is take a deep breath," Mahr said. "First thing you got to do is take a deep breath. Try to stay calm. But prior to getting that call, get prepared. And one of the ways you can get prepared is to listen to this story and some of the advice we're going to give you. Do it now, rather than later. It's like having that disaster kit ready to go because it can happen to anyone, anytime. Unless you're really, really secure in your job, and who is nowadays?"

Staying calm is the first component of a "job loss disaster kit" that Mahr suggests everyone all make. It's also important because before you leave the boss's office, you need to know and ask specific things.

"Look at opportunities to negotiate a severance package if you're offered one. Look at how you can take unused vacation days as part of your exit package," Mahr said.

Also, be sure to have complete understanding of what happens to your benefits, your health, dental, and vision insurance plans. You'll need to know your disability and life insurance plans. When do they expire? What are your options? Those are the questions to ask.

Mahr also recommends you understand your health insurance options involving COBRA, the federal law that gives workers the right to keep their group coverage for limited time after losing a job.

"COBRA can be very expensive. So your spouse may have a job and if so that might be a better option for you," Mahr said.

You have 60 days to let the employer know if you want to accept their COBRA plan or not, so don't rush your decisions.

"You really want to assess your health insurance options. It's a critical piece. And it's usually a huge expenditure for you," she said.

Also, ask for a service letter, and do it in writing. A service letter is not a reference letter, but it's yours by right. It confirms your dates of employment and job title. It can have a brief description of your duties and responsibilities.

Once you're out the door, make fast tracks to the unemployment office and file for compensation immediately.
"That would be my first thing to do. It gives you a minute to catch your breath before you go home and break the news to your family," Mahr said. She adds if you go to this conversation exuding confidence, everything is going to be alright.

How do you do that? Here are some tips:
-- Be honest.
-- Stay calm.
-- Stress that "you're all in this together."

"Tell your family there's a change in our circumstance, we don't know how long it's going work, but here are some ways we're going survive. We're going be survivors. We are not going to be victims," Mahr said.

-- Have ideas of how to cut spending.

To do this, you must know exactly how much money you have coming in and going out each month. Use all your check stubs and receipts to list your fixed expenses (housing, insurance premiums, taxes, installment payments, and other debts). Then estimate what you spend on food, clothes, school, gifts, and other expenses. You may find that you don't have a clear picture of where the money is going.

Here are some "Dos and Don'ts":

-- Do call your creditors.

Let them know your situation and what you're doing about it. Don't ignore bills or you may lose what you already have. Immediately contact your creditors: the finance company, bank, credit union, and department stores. Make an appointment to explain your problem.

-- Do evaluate the ways your family uses money.

Take a financial inventory. Look at what your family now owns. A few minutes spent calculating your family's net worth just might boost your spirits. Add up the total value of all your belongings and subtract from that total the amount you owe. Remember to figure the value of everything at today's market prices, not the price you paid for it. In other words, how much could you sell it for,

-- Do utilize agencies like the United Way for help.

There are other things to do if at all possible:

-- Don't dip into your retirement savings.
-- Don't put your home at risk.
-- Don't over use credit cards.

"You know sometimes we prepare ourselves for getting jobs but we don't prepare ourselves for this part of life. Sometimes reality. So that disaster kit I talked about it's not just if Ike comes by. It's it life throws you a boomerang," Mahr said.

On Monday, November 10, several job strategists and career professionals will join forces to help those in the metropolitan area struggling with job and career questions. You can call 314-969-8655 or log on to KSDK.com for a live web chat between 5 p.m. and 11 p.m. It's free and open to everyone.