If you get laid off

The unemployment rate spiked to 7.2% in December and if you are part of that statistic then you may be wondering what to do next.

6 Steps to Take the Moment You Are Unemployed

By Laura Dawn Lewis

(couplescompany.com)

Step 1: Call Your State's Unemployment Office
Don't feel guilty about this. You and your employer have been paying into this fund your entire working life. You've earned the money you are going to receive through your own hard work. This is the very first thing you want to do the second you are terminated. Call your state's unemployment office. Most states begin the benefit period from the day you call, not the day you were let go. You will not get paid for the first week of unemployment in most states (although in some they count the day you call as the 1st week--let go Friday, call, become eligible the following Monday. ) It will take 3-4 weeks to get your first check, longer if you were fired because they must do an investigation. In most cases you will still receive compensation even if you were fired. The exceptions are termination for misconduct (lying, cheating, abusive language etc...) or criminal acts.

Step 2: Plan for the Best but be Prepared for the Worst
Make list of your liquid assets including stocks, bonds, 401K, IRA's, credit lines, savings, and pawnable items like CD's, VHS or DVD movies, electronics, jewelry and other items of value. Depending on your savings situation and monthly expenses, you may need to liquidate these to survive. If it appears you may need to access these assets, move any high risk stocks into to lower risk stocks or cash them out and put them in a savings account for this period. The last thing you need to happen now is watch your saving drop 98% with stock market (as many tech workers have seen). You can always switch the funds back once you are working again.
You will have the option of rolling over your 401K or cashing it out. Most financial advisors will tell you to roll it over. If you have to make a choice between being homeless without food or rolling over your 401K, use it to survive. If it is not essential to your ability to survive, roll it over. Cashing out a portion or all of your retirement is a last resort and should only be used if you do not have any other choice

Step 3: Make an Honest List of your Current Liabilities and Payments.
What can you cut? What cannot be avoided. If you have to miss payments, choose bills that will not directly effect your ability to survive like department store credit cards, health clubs and membership dues. To find a job you need a phone, electricity and roof. Your Internet connection is also critical. Car insurance is very unforgiving and you need a way to get to your interviews.
In a crisis situation, most credit card companies and automotive lenders will allow you to skip a payment or two, if you ask. You generally will still have to pay the interest and any late charges on the account so this may or may not help you. Utilities are less forgiving. In most cases your cable will be shut off at 20-days past due. Phone companies and the electric company can go as far as 45-days past due before you lose service. Car Insurance will cancel within 10-days of being past due. If you are a renter and can't pay your rent, it generally takes 60-days for the manager to legally have you removed from the premises although they will give you a 72-hour eviction notice if you are more than 3 days late.

Step 4: Prepay As Much as Possible
Since you've just lost your job, you've got the most money you'll have until you receive your first new paycheck. Pay as many critical bills as far in advance as possible like Insurance, phone and electricity. You'll be glad you did this when the other bills start rolling in. Stock up on essentials like toilet paper, shampoo, frozen and canned foods and pet food.

Step 5: Moving into Survival Mode
The average person is currently taking 4 months to find a new job. Plan on taking six months. This means you are going to need to adjust your lifestyle and move into survival mode. The first place to save is unneeded luxuries like maid service, gardeners, and even add-on convenience services like caller ID, call waiting, premium cable channels and pagers. The second best way to save money is on your food budget.

Step 6: Health
Most insurance companies will not allow you to do more than one month's worth of prescriptions at a time. Sometimes your doctor can request multiple months if you are to be out of the country for an extended stay. If you depend upon medicine for your health, get as many months as possible before your prescription card expires. That $10 a month prescription could turn into a $120 a month requirement you can't afford right now.