How To Stay Calm When You Lose Your Job


You’ve just been told you will lose your job.

It’s the last thing anyone wants to hear.

Emotionally, it can be a roller coaster.

trimper\'s coaster

One minute you’re freaking out, wondering how you’re going to manage to keep you and your family in your home.  The next minute you’re calm, telling yourself, “Things will work out, I can find another job, it’ll be okay.”

But then you think, “But what if I don’t?  What if I lose everything I’ve worked for?  What if, what if, what if?”

Then after hyperventilating and sobbing uncontrollably for awhile you tell yourself, “I hated that job anyway.  This could be the best thing that ever happened to me!”

You calm back down and put a smile on your face.

Until you realize you only have one more paycheck and then zilch, nothing.  And you freak out again, convinced you will be in a homeless shelter in no time.

You get the picture.

Losing a job is never easy, but wouldn’t it be a whole lot better if you didn’t have to freak out quite so much?

Is that possible?

I think so.  But it requires a lot of mental work and an emergency fund.

It is possible to stay calm when you lose your job if you plan ahead. Take these steps today.

Could you lose your job?

If you work for an employer of any sort, there is ALWAYS that possibility.  No matter how long you’ve worked for them or how valuable you are.  There is someone other than you that could make the decision of whether or not you lose your job. I hate to break it to you. But it’s true.

If you are self employed there is the possibility business slows down.

Even if you are pretty confident that those things will never happen, you still need an emergency fund because there are other emergencies in life besides losing your job.  We are just focusing on job loss in this post.

You could have a medical emergency or there could be some type of natural disaster in which you could need a large sum of money to get back on your feet.  Not to mention smaller emergencies like a car wreck or a major appliance dying. It’s better to be safe than sorry, right?

Honestly, I’m not trying to make this a depressing post. I just want you to understand the importance of an emergency fund.  Too many people think it will never happen to them and then when it does, they are in a bad situation and have to go through times that are much worse than they need to be. I want you to understand it doesn’t have to be like that.

In the Spring of 2015 I found out I was getting laid off.  First time ever.  And it sucked.  But it didn’t suck nearly as much as it would if I didn’t have my emergency fund and know how to manage my thoughts and emotions. . . at least most of the time.  If you want to learn how I do it check out Get A Handle On Your Money, Stop Stressing or Start Here.

Because I tend to my written budget every month, I know exactly what my expenditures are and therefore, how much I need each month to maintain my current standard of living.  By my calculations, I should be able to make it about two years without a job without changing my standard of living and without earning any money on the side.  (This is by living off my emergency fund.  I’m not cashing in IRA’s or my kids’ college funds.)

But I know I won’t be able to continue my previous standard of living and not earn any money.  Not because I’ll be unable to physically, but mentally.  It’s only natural to me that I try to reduce my expenses even more than my working days budget and with more time at home, I can do more of the things I do on the side to bring in extra income. This will help me stretch my emergency fund.  The less I have to use it, the better.

If I’m not making enough money to continue after two years, I would sell my house.  Even if I had never been laid off, I had planned to sell my house and downsize after both my kids were in college.  That happens in three years.  So, in a year or so, I may decide to go ahead and sell my house a year or two earlier than planned.  Because I’ve worked hard to pay extra on the principal on my mortgage, I’ll have a nice bit of equity when I sell.

So how do YOU build an emergency fund?

The first thing is, you have to get started following a budget.  Now. The time to plan for a job loss is not when you lose your job, but long, long before.  You have to start saving an emergency fund.

Most experts say you should have 3-6 months of expenses saved in your emergency fund.  Of course, you can’t do this if you don’t know what your expenses are, one more reason it is essential you create a budget. Prior to creating a big emergency fund though, you have to pay off all debt except your mortgage.  This is basically Dave Ramsey’s baby step plan.

  1. Make a budget.
  2. Save a baby emergency fund of $1,000.
  3. Pay off debt except your mortgage.
  4. Build a fully funded emergency fund of a minimum of 3-6 months expenses.

If you know losing your job is fairly imminent then put step three on pause and jump straight to building up your fully funded emergency fund.

I’ve always been a bit of an overachiever though, so instead of 3-6 months, I liked to keep it at a nice even round number well above that amount.  I just liked the number and the extra bit of cushion, I guess.  Besides, the 3-6 month plan is assuming you immediately start trying to find another job and take whatever you can get.  Since I knew if I ever lost my job I wouldn’t want to just take whatever job I could get and I might even consider starting my own business, I knew I would need more of a cushion.  If that’s you too, plan on a bigger emergency fund.

When you are working on building up your emergency fund all extra money gets thrown at it as quickly as possible.

Take a look at your budget.  Whatever money is left over after paying your expenses, gets put into the emergency fund immediately.  Not, when you get around to it, or it will never get there and you’ll end up spending it on the great sale on a pair of shoes that is just too good to pass up.  Immediately.

Once it’s in your emergency fund, you don’t touch it.  Period.  Unless it is truly an emergency and you’ve thought about it for probably a minimum of 24 hours.  A sale is not an emergency.  It is a serious decision taking money out of your emergency fund.  This is the money that you will use to survive if you lose your income. How will you feel if you lose your job and then wish you had the money you blew?  Exactly.

You will want to put this money into a bank account that is easily accessible, but not too easily accessible.  Definitely do not just keep it in your checking account or it will disappear.  I use an interest bearing money market account at my home bank for a little and then an online interest bearing savings account through Barclay Bank for the bulk of it.  I just opened the Barclay account recently because they pay 1% interest, which is better than the money market.

The point is that while you want this money to be earning some interest, that’s not the main point of having it.  It is not invested in anything that you can’t get your hands on quickly if needed.  You don’t want to put it into a CD or anything that has a waiting period.

Not freaking out

How to Stay calm when You Lose Your Job

Once you are on your way to a fully funded emergency fund you can breathe easier knowing if something were to happen, you have more than you would have if you weren’t saving anything at all.

This allows you to not freak out and panic if the unfortunate does indeed happen.  You will be able to take a little more time to decide what to do next.  You won’t have to rush out into the streets begging for any job you can get.

You can breathe easier knowing you’ll be okay for a while.  This will allow you to present yourself better when working on applications and interviews because you won’t seem desperate.  You’ll be able to think better and make better decisions about the steps to take to get you on the right path for your future.

Most likely, there will still be some times when irrationality grabs a hold of you and you start doing the freaking out panicked thinking again.  This is when you will have to really work to mentally stay in charge of your thinking.

How we talk to ourselves determines how we feel.  If you think and tell yourself anxiety producing thoughts, such as,

  • “This is terrible!”
  • “What am I going to do??”
  • “I won’t be able to find a job that pays as much as I need.”
  • “I’m going to lose my home.”
  • “We’re going to starve.”
  • “I’ll have to move back in with my parents!” (Yikes!)

How are you going to feel?

Like this?

Self Portrait As A Stressed-Out Bride To Be

Anxious. Stressed. Panicked.  Freaked out.

Not helpful.

Being stressed and anxious is probably not going to help you find another job or figure out what to do.  It certainly isn’t going to help you make sound decisions.  While these thoughts and feelings are normal, you don’t have to wallow in them and let them hang around.  Pay attention to what you’re thinking about.  If you catch those unhelpful thoughts going through your head tell yourself to STOP!

This is the time to be kind to yourself. Talk calmly to yourself. Reassure yourself by telling yourself,

  • “Things will work out.”
  • “I will figure things out.”
  • “It will be okay.”

Feels better, doesn’t it?

The thing is, if you have an emergency fund, you can do this and really mean it.

You may have to repeat those reassuring messages hundreds of times of day.  That’s okay.  You know the other thoughts are not going to be helpful.  Telling yourself to stay calm and that you will figure things out just might.  Try it.

Have you ever experienced a job loss?  What do you do to plan for a financial emergency?

Let me know in the comments!



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