Many Americans have spent the last several months getting back into the workforce after being laid off due to the COVID-19 pandemic. Recovering from the financial fallout can bring turmoil, but there are also silver linings.
American workers became familiar with stories of job loss and salary cuts as the pandemic ravaged through 2020. According to Charles Schwab’s 2020 Modern Wealth Survey, 25 percent of Americans said either they or a family member have been furloughed or laid off during the pandemic. Another 30 percent of respondents said they or a family member have experienced a salary cut or reduced work hours.
Unfortunately, in many cases, these COVID hardships stacked on top of existing financial woes for U.S. consumers. Even before the pandemic hit, a majority of Americans, or 59 percent, were living paycheck to paycheck, according to Charles Schwab’s 2019 Modern Wealth Survey. On top of that, the 2020 Modern Wealth survey found that Americans are nearly 15% more financially stressed today than they were before the COVID-19 outbreak.
But it’s not all bad news. The hardships of 2020 have served as a wake-up call for many consumers. The 2020 Modern Wealth Survey found that 36 percent of Americans said they are now more likely to maintain savings to cover emergency expenses, 40 percent said they are likely to save more in general compared to before the pandemic, and most consumers surveyed stated that relationships now drive their overall happiness more than twice as much money. In 2020 alone, Americans paid down $60 billion in credit card debt inherently allowing monies once used to pay burdening debts to now transition to rebuilding up their financial security.
How to recover financially from losing a job
Being laid off is a scary time and can leave the individual impacted feeling alone, especially in these isolating times. So, how can you recover from job loss? Here are some tips from The Dave Ramsey Blog combined with some personal insight to get started in the right direction:
- Connect with family and friends – This may be the most important tip. Let those closest to you know you’ve fallen on a hard time and will need encouragement. You can’t recover financially if you’re not recovering mentally – and nothing helps an emotional recovery like a strong support system.
- Figure out what immediate benefits you have – If you’ve been laid off, it’s possible your employer offers severance pay. That could come in the form of a one-time payment or several payments spaced out over a few weeks or months. You may also want to consider filing for benefits through the Employee Benefits Security Administration.
- Tighten up your budget – Create a new budget based on your new income. Consider pausing non-essential spending, including gym memberships and monthly entertainment charges. Television has filled the void of social interaction – and streaming apps, when added up, can become a significant monthly expense.
- Hone your job search – Brush up your resume and begin your search by making a list of the people in your immediate circle who can help you get connected in a certain field. Reach out to them and explain your situation. Meanwhile, be sure to keep up with online job boards – persistence is key. Consider taking contract or part-time work even temporarily. Ways of connecting professionally, once thought to be taboo like using social media platforms, are now acceptable in an ever-changing social and professional landscape.
- Maintain a positive, long-term mindset – Stay determined and positive. Remember: this won’t last forever. The more positive you remain, the more motivated you’ll be to keep searching for new opportunities.
A few additional tips to help:
- Treat finding a job like a job – staying in a familiar routine can provide structure. Plan your day. Set a schedule – do not forget to schedule lunch – and be sure to “clock out,” putting the computer away until tomorrow.
- Remember, you are not alone – The pandemic has affected everyone. Most likely, you know a friend, family member or community member enduring the same struggle as you. This moment in time does not define you – try to not take the unexpected job loss personally. You are more than your job, and now is the time to remind yourself of that.
- Do not forget self-care – Do not get consumed with self-pity. You can visit pity-city, but do not call it home. Take a walk, go for a run, put on a face mask, or relax in a bubble bath – do not forget about you.