Skip to content

Lost Your Job? Here’s What to Do Next

No matter how good your relationship with your boss or how varied your skills, you can still lose your job due to forces beyond your control. It could be a bad economy, outsourcing, automation, or budget cuts made at a board meeting you weren’t invited to.

Whatever the reason, you now find yourself without a job. What are you supposed to do?

In this post, I attempt to answer that question. Specifically, I cover some essential steps to help you save money, cope with the stress, and ultimately find new employment.

If you’re reeling from the shock of being suddenly unemployed, this post is for you.

Calculate Your Runway

The first thing you should do after losing your job is sit down and calculate how long you can live on your current savings. Borrowing a term from the startup world, we’ll call this your “runway.”

Calculating your runway is relatively simple. Divide your savings by your average monthly expenses. The resulting number of months is your runway. For instance, if you have $10,000 saved and your average monthly expenses are $2,500, your runway is 4 months.

If you don’t know your average monthly expenses, a financial planning tool like Mint or Personal Capital can be extremely helpful. These tools let you connect all your financial accounts (checking, savings, credit cards, investment, etc.) and then show you a variety of useful reports. One of these reports will be your average monthly expenses/spending.

If you did the calculations and discovered that your runway is shorter than you expected, don’t panic. In the next two sections, we’ll look at some ways to increase your runway.

Cut Unnecessary Expenses

I’ll admit: the way I had you do the runway calculation in the previous section was a little unrealistic.

That calculation used your average monthly spending across all categories. However, much of that spending is likely unnecessary. So to increase your runway, you should first cut unnecessary expenses.

What’s an “unnecessary” expense? I define it as any spending that isn’t essential for keeping you healthy and safe. Here are a few examples:

  • Music subscriptions
  • Streaming video subscriptions (Netflix, Hulu, etc.)
  • Eating out (cooking your own food is cheaper and healthier)
  • Coffee shops (you can make excellent coffee at home for much cheaper)
  • Video game and other entertainment purchases
  • New clothing (unless you’re purchasing something to wear to a job interview)
  • Shopping (online or in-person) for non-essential items

Cutting these expenses won’t be fun. But once you see how much it can increase your runway, you’ll realize it’s worth it.

Remember that you aren’t cutting these expenses forever. You’re just doing so until you find a new job.

Reduce Other Expenses

Cutting unnecessary expenses is a great start. However, there are likely many “essential” expenses that you can find ways to reduce, further increasing how long your savings will last.

Below, I’ve put together some ideas for reducing your spending on essential expenses:


You need a place to live, of course. But there are still ways you could reduce your current housing costs while you search for work.

If you rent, consider getting a roommate (or roommates). Or, consider downsizing to a smaller place or moving to a more affordable part of town.

If you own your home, look into refinancing your mortgage. It won’t always save you money, but it’s worth examining. You could also rent out a room to bring in some extra income.

Finally, consider moving in with a friend or family member. Be sure that expectations are clear upfront:

  • How long will you be able to stay there?
  • Will you need to pay rent (or pay another way, such as helping with chores or childcare)?
  • How will you resolve disputes?

This situation is a last resort, but sometimes it’s your best option.


If you stop eating out, that will already reduce your food expenses dramatically. But even after that, there are other things you can do to make your costs even lower.

One of the biggest changes you can make is shopping at a more affordable grocery store. Your neighborhood “international” grocery store likely has cheaper prices (and fewer crowds) than the local big box store. And, obviously, this isn’t the time to shop at Whole Foods or another high-end grocer.

You can also make your ingredients go further by learning to cook some budget meals. I recommend checking out the recipes on Budget Bytes, which are all quite affordable but still reasonably healthy. The subreddit r/EatCheapAndHealthy is also a great resource for this, as is our podcast episode on the topic.


While an unlimited data plan is nice to have, it’s not essential. Consider downgrading to a budget carrier.

With the proliferation of free WiFi, you rarely need to use data as much as you think. Plus, being unemployed likely means you’re spending most of your time at home where you always have WiFi access.


Being unemployed means you aren’t commuting, which will already reduce your transportation expenses. But there are ways to reduce them further.

To start, consider walking, biking, or taking public transit instead of driving. I recognize this isn’t possible in all cities (especially in the United States). But if you can avoid driving even some of the time, it can seriously reduce your transportation expenses.

On a related note, shop around to see if you can get a lower car insurance rate. This is a good habit to get into regardless, but particularly if you’ve lost your job.

Student Loans

Unfortunately, student loan payments are an “essential” expense if you have them. However, there are ways to reduce your payments (or even pay nothing) if you’re out of work.

If you have federal loans, you’re eligible for the following options to reduce your payments:

  • Income-driven repayment
  • Deferment
  • Forbearance

On an income-driven repayment plan, your loan payments are proportional to your income. In some cases, this could make your payments as low as $0 / month (or, more likely, a lower but more manageable amount).

With deferment, you temporarily postpone making loan payments. Importantly, interest will not accrue on subsidized loans (such as Direct Subsidized Loans or Federal Perkins Loans) during deferment. However, interest will continue to accrue on other types of student loans.

Finally, forbearance is either a temporary reduction or suspension of all loan payments due to some sort of life hardship (such as job loss). Unlike deferment, interest will continue to accrue on all types of loans while they’re in forbearance. For this reason, you should typically consider forbearance only if deferment or income-driven repayment aren’t good options.

To inquire about income-driven repayment, deferment, or forbearance, contact your loan servicer. They will likely have information about all these options on their website. This guide from Federal Student Aid also gives a comprehensive overview of the differences between income-driven repayment, deferment, and forbearance (and which is right for your situation).

Whatever you do, be sure to contact your loan servicer and let them know you’re experiencing financial hardship. Working with them to reduce or postpone your payments is always better than stopping payment without notice. Simply stopping payments can put your loans in default, harming your credit and long-term financial prospects.

Note: As of this writing, all federal student loans are automatically in forbearance until after June 30, 2023, though you can still choose to make payments if you want. We’ll update this article when/if this changes. Learn more here.

Trying to reduce your payments on private student loans? Learn how to refinance them.

Apply for Unemployment Benefits

After taking stock of your savings and expenses, go ahead and apply for unemployment benefits.

Don’t be ashamed to do this; unemployment exists precisely for this reason. You’ve paid into the system from all the jobs you’ve worked, after all.

The details of applying for unemployment vary based on your state. To find the relevant details, visit this page and select your state from the map.

While you’re waiting for your unemployment application to process, you can start searching for a new job.

Job Hunting Is Your New Job

While unemployment benefits can be immensely helpful, they ultimately exist to help you support yourself while you find another job.

When you’re unemployed, you should treat job hunting as a full-time job.

Viewing it this way will keep you motivated to find further employment. (And keep you from spending all your time binging YouTube videos and scrolling Instagram).

Dust Off Your Job Application Materials

If you haven’t applied for a job in a while, your job application materials (and skills) could probably use a refresh. Make sure to have these areas in order before you start applying for jobs:

Update Your Resume

How long has it been since you updated your resume? At the very least, you should update it to include the job you just left. And, depending on how long it’s been, there might be some new skills you could add as well.

Furthermore, be sure to tailor your resume to each job you apply for. A prospective employer doesn’t care about everything you’ve done. They care about the experience and skills that make you most qualified for the position they’re trying to fill. Anything else is a waste of everyone’s time.

For more advice on creating a resume that will get you jobs, check out this guide.

Craft a Great Cover Letter

Along with your resume, cover letters are still key to applying for most jobs.

You probably have a cover letter lying around from a previous job that you can use as a starting place for new job applications. But even more so than your resume, you must tailor your cover letter to each job you apply for.

The cover letter is a chance to talk about things your resume doesn’t show; don’t waste the opportunity. For guidance on writing a superb cover letter, see this article.

Update Your LinkedIn Profile

Much as we love to make fun of it, LinkedIn has become an important part of the job search process. So while you’re updating your resume, take a few minutes to update your LinkedIn profile as well. Add any new experience or skills, and see if there are any potentially useful connection requests you’ve overlooked.

Furthermore, make sure to indicate on your profile that you’re looking for job opportunities. This will help recruiters and people in your network connect with you about potential jobs. Here’s how.

Finally, note that you don’t have to wait for recruiters to come to you. LinkedIn lets you search for jobs and even set up alerts for new postings that match your criteria.

For further help creating a LinkedIn profile that will impress recruiters, check out this guide.

Update (or Create) Your Personal Website

If you have a personal website, now is the time to update it. You can add new items to your portfolio, write some blog posts to display your expertise to prospective employers, or just give your website a general refresh.

Don’t have a website? We highly recommend creating one; it’s an excellent way to stand out from other job candidates. Learn how to create a personal website here (no coding required).

Brush Up On Your Interview Skills

Last but not least, make sure your interview skills are up to par. If you haven’t interviewed for a new job in a while, they might be a bit rusty.

Because this is such a huge topic, I’ll direct you to these resources for detailed job interview advice:

Apply for One Job Each Day

With all your application materials ready, you can now start applying for jobs. I recommend applying for one job each day. This is a realistic goal for most people and will help you maintain momentum without getting overwhelmed.

If you can apply for more than one per day, great. But don’t sacrifice application quality for quantity. Better to send one thoughtful, tailored job application each day than several hurried ones.

Reach Out to Your Network

While job boards are a great place to start when searching for work, your network is far more powerful.

People you know can open you up to job opportunities before they get posted on job boards (or to jobs that aren’t publicly listed). Plus, they can help get your application materials directly into the hands of people with hiring power (instead of languishing in some online application system).

But your network can only help you if you let them know you’re looking for work. Don’t assume they know because you’ve indicated it on your LinkedIn profile. Reach out directly and explain that you’re looking for a new job.

Don’t sound desperate or annoying; remain polite and professional. Your network isn’t obligated to help you, but most people will be happy to help if you ask politely.

You should also make it as easy as possible for them to help you. Don’t just say, “I’m looking for a job, please help.”

Instead, explain specifically what types of positions you’re looking for, what your qualifications are, and how the person you’re emailing can help. If they’re interested, send over a resume. If nothing comes of it, move on and don’t take it personally.

Skill Up

Even though finding a new job should be your main focus, you probably have more free time than when you had a job. Instead of wasting all this time on streaming video and social media, use it to improve yourself.

No matter what you do or where you are in your career, there’s always more to learn. Whether this means learning a new skill or leveling up a skill you already have, it will only make you a more marketable job candidate.

Even if you don’t need the skill for future jobs, it will give you something to talk about in a job interview. It’s far more impressive to say you spent the 3 months you were out of work learning something new than catching up on Netflix shows.

Here are some of our favorite places to learn new skills:

  • YouTube – A great place to learn almost anything. Just be sure you’re using it to learn and not to waste time.
  • Skillshare – Learn all kinds of creative skills from professionals.
  • Treehouse – If you want to learn how to code, this is the place to start. If the subscription doesn’t fit in your budget, Codecademy is a great (albeit less comprehensive) alternative.

Find Freelance or Part-Time Work

In an ideal world, you’d be able to find a new full-time job in the field of your choice before your unemployment benefits run out. However, that won’t always be the case (especially during a bad economy).

If you find yourself in this position (or find yourself getting bored while applying for jobs), consider picking up some freelance or part-time work.

Sell Your Skills with Freelancing

You likely have many skills that you could use to earn money on a freelance basis. For instance, could you use your writing skills to do some freelance writing? Could you use your organizational skills to work as a virtual assistant? Or, what about using your attention to detail to transcribe audio?

Freelancing your skills won’t always be glamorous, and it’s certainly easier if you already have the right connections. But then again, you have all the time you’d normally be working a day job to find freelance opportunities.

Find Part-Time Work

If freelancing your skills isn’t possible, consider more traditional part-time work. Most types of hourly jobs are always hiring, and earning income from them is certainly better than nothing.

Remember: this is a way to get yourself through hard times until you can find a better job, not what you’ll do for the rest of your life.

Get Entrepreneurial

If you really can’t stand the idea of working retail or food service, then create your own work. There are all kinds of microbusinesses that almost anyone can start with some basic equipment and sales skills.

Here are just a few off the top of my head:

  • Mowing lawns
  • Shoveling snow
  • Powerwashing driveways
  • Hauling away junk
  • Painting houses
  • Walking dogs
  • Babysitting/nannying/childcare
  • Selling things on Etsy

And these are just a few of thousands of ideas. I bet you can come up with some that are even better. For more ideas, check out these guides:

Take Care of Yourself

While you should put as much energy as you can into finding a new job, job loss is also stressful. I don’t want to deny or minimize that, as the stress can take a big toll on your mental and physical health.

So while you’re looking for a new job, be sure to keep taking care of yourself. To start, try to eat healthy food, exercise daily, and get enough sleep. These are easier said than done (especially when you’re stressed), but taking care of these areas will keep you feeling good.

Besides the basics, don’t forget to practice self-care. Take some time out of each day to do something that brings you joy and helps you relax. Don’t view these activities as “optional,” either. Make them as much of a priority as looking for jobs.

Next, remember that you have inherent worth as a human. It’s very easy to tie up your self-worth with your professional accomplishments and income. But if you think this way, then losing your job will be even more stressful. Try to separate yourself from your accomplishments.

Finally, don’t be afraid to ask for help if you’re feeling depressed, anxious, or overwhelmed. Talking with a trusted friend or family member is a great place to start, though I also encourage you to speak to a mental health professional.

For help finding mental health resources near you (including free and low-cost providers), check out this guide from the National Institute of Mental Health.

Job Hunting Is a Marathon

I don’t want to sugarcoat it: losing your job sucks. But I hope that the tips I’ve shared in this guide will make the process of finding a new job suck a little less.

It can take weeks (or months) to find a job, and factors such as a poor economy can make it take even longer. Don’t beat yourself up if you’re struggling.

Image Credits: for hire sign