When my uncle was laid off a little more than a year ago, he sort of saw the writing on the wall. He knew the company was planning three rounds of lay-offs, and as a relatively new employee — but highly paid because of his level of expertise — he was pretty sure he was going to go sooner or later. So he had a bit of time to update his resume and firm relationships with his network.

Not everyone is as lucky as my uncle, though. In some cases, being laid off comes as a complete surprise. You may or may not have an emergency fund to help you out (it’s better if you do have an emergency fund), and you may not know where to go from here. If you are laid off, here are some things to keep in mind:

Don’t Sign Anything Right Away

Never sign anything — even a severance package — right away. When you are presented with the paperwork, ask if you can take it home to discuss it with your partner and your attorney. Make sure you keep a record of what was said. Try to remain calm. You can ask “why?” but it’s best not to rant about it and moan about the unfairness of it all. Look at what’s in the severance package, and see if you can negotiate another month of health care, or a little more money. The worst they can do is say no.

Sign Up for Unemployment

Your first stop, after being laid off, should be the state unemployment office in your town. Find out what documentation you need to get started, and make sure you get the wheels of bureaucracy turning as quickly as possible so that you receive something to help you along.

Start the Job Hunt as Quickly as Possible

If you are planning to get another job, you need to get on it. Some experts warn that if you are unemployed for more than six months, you become almost unemployable, since other companies wonder why you’re still on the market. Even if you have a big emergency fund and unemployment, it’s a good idea to hit the pavement if you want another job. Update your resume and brush up on your interview skills.

Tweak Your Budget

The size of your emergency fund, and whether or not your partner has a job, will help you determine how much your budget needs to be tweaked when you are unemployed. Look at what costs you can cut back on. Make those cuts now, rather than waiting until you are almost out of money. You should also figure out your options for moving your retirement account.

What About Health Insurance?

COBRA is hugely expensive. If you have a severance package, maintaining actual coverage — without the need for COBRA — might be more valuable then getting more money. Look at your options. Get a physical showing you are healthy before your coverage runs out. You can look at individual and group plans through web sites like eHealthInsurance.com (the company I used to find insurance as someone who is self-employed). You might be surprised at the affordability.

Consider Starting Your Own Business

Another consideration is this: What about starting your own business? Now might the right time to start up a web site and monetize it, start a side business out of your home, or even begin an income portfolio. If you have years of experience in the field, you could even start a consulting business. If you have an emergency fund to help support you, plus unemployment, you might have just what you need to be an entrepreneur.

This article was included in the Carnival of Personal Finance



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.