How To Handle Being Laid Off
ALEX COHEN, host:
From NPR News, it's Day to Day. New unemployment numbers are coming out this Friday and they're expected to be the worst in decades. If you're last day of work is right around the corner, you might be wondering, what's next? Joining us now is Michelle Singletary, personal finance contributor for Day to Day. And Michelle, let's say today was your last day on the job, what would be the first thing that you would do?
MICHELLE SINGLETARY: You know, it's probably not what you think. You know, I would call someone to just help me get through this. A pastor, a friend, a counselor, someone that can sort of just help you figure out that this isn't just going to, you know, devastate you life. I mean, certainly they're going to be some hardships, but you really need to address the emotional issues before you get to the finances. Because if you don't, lots of people get laid-off and they just sort of sit around in these days because losing a job is like death, I mean, for a lot of people because, you know, especially with the economy the way it is. Probably that's the first thing. Then the next, very next thing after you've had this conversation and the person has helped you through this, get a notebook and on each page I want you to put some of the following things. I want you to put a page on savings, a page on severance if you've gotten a severance package. I want you to do a page on the things that you might be able to sell to raise some money. I want you to create a page for investments. And so for each of these sections, you got to figure out, you know, basically, what I'm telling you to do is size your situation. How much money do you have in savings? How money is going to come from severance? How much can you get to sell different things you have? Like if you have two cars, you might have to sell one of the cars. So that you can see where the money is going to come from to keep you going for the next couple of weeks or months while you look for a job.
COHEN: Michelle, you always give us the wise advice that you should if you can pay off you debts, but what if you've been laid off in this economy? Should you still try to pay off your debt?
SINGLETARY: No, not aggressively. At this point, you are in reserve cash mode. So you need to reserve as much cash as possible. So for, you know, if you've been on aggressive debt pay down, stop that and just make the minimum payment for now and you may not even be able to make that. So, you want to focus on the basic things - food, shelter, utilities. That's what the majority of your cash should go if you don't have a good savings to keep you through, if you don't have that savings that I've been urging people to have three to six months. You can't afford to try you know, pay off, you know, aggressively debt while you're - you know, don't have a job.
COHEN: And we should probably point out that one of the first things I would do is apply for unemployment insurance.
Ms. SINGLETARY: That's absolutely right. You know, when people are hit with the layoff, you know, they don't want - you know, people are very proud and they, well, I don't want unemployment, I'm going to look for a job. Well, it can take a couple of weeks to get that check, and if you don't get a job in that time period, that money is going to come in handy. If you qualify for it, you're entitled to it, you know, and go ahead and apply for it because you don't know how long it's going to take before those - that check kicks in. Like I said, it could be a couple of weeks. So you want to go to your state unemployment office or go online, much of these you can do online. You don't even have to show up in the office. Many people have those little stereotypes of these long, you know, lines in the unemployment office and people with sunglasses embarrassed. You know, you're in a boat with a lot of people. You should not be ashamed if you'd been laid off. And if you qualify for unemployment insurance, you need to do that. You're going to have to have some things in hand - your Social Security number, your mailing address. You're going to have to have the names, addresses and days of employment for all your past employers for the last two years.
COHEN: Michelle Singletary writes the "Color of Money" column for the Washington Post. Thanks, Michelle.
Ms. SINGLETARY: You're welcome.
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