The Recession Survival Guide for People Who Lost Their Jobs

The Recession Survival Guide For People Who Lost Their JobsBy now, the damaging effects of the present pandemic are felt in nearly every corner of the globe.

In every country where COVID-19 is rampant, strict government policies have been implemented to curtail the further spread of COVID-19, which all invariably revolve around one word: closing – the closing of borders, of airports, of schools, and of businesses that are deemed non-essential.

As non-essential businesses involuntarily turned off their lights, their employees involuntarily turned in their work uniforms and any hope of surviving this global crisis financially unscathed.

Each week, the number of people who have newly filed for unemployment in the US makes my jaw drop, and that number will continue to climb before the growth rate of new coronavirus cases peaks.

Given the precarious financial positions many started off with pre-coronavirus, this mass exodus of jobs will bring financial devastation to far too many households.

But not all hope is lost.

If you find yourself without a job due to the current recession, there are steps you can take to save yourself from financial ruin, as insurmountable a task as it may seem.

Step 1: Take a Breather

You’re not in the right headspace for to-do lists yet, so don’t worry about them for now.

Give yourself permission to wallow for a day or two.

Grab a giant tub of your favorite ice cream, put on comfy pajamas, and just pour your thoughts and feelings on paper. Cry uncontrollably if you need to. Nobody will judge you for being upset.

This cathartic process should help you slowly purge the pain of job loss out of your system.

It’s also not a bad idea to reach out to others for support if you feel ready – be it FaceTiming with close friends and families, or joining support groups on Facebook.

As soon as you feel good enough to set your emotions aside, it’s time to tackle the practical side of things.

Step 2: Apply for Benefits

The first order of business is to immediately apply to all the government and employer benefits that you qualify for.

Government benefits:

If your country offers any type of federally mandated employment insurance benefits, file it before you do anything else.

These benefits will usually pay you a portion of your previous salary. So while they might not completely tie you over until you land your next job, they should significantly lessen the impact of job loss.

Similarly, you should file your taxes as soon as possible if you’re expecting a refund.

Employment benefits:

Depending on your previous employer’s company policy and how long you’ve worked there, you may be eligible to collect employment benefits.

Types of employer compensation you could expect:

  • Severance package (money you might receive for leaving your job unwillfully)
  • Termination pay (money that is paid to you in place of the required notice of termination)
  • Compensation for unused paid vacation or sick days

Research the law in your country, consult your employee handbook or employment contract to find out what you might be owed, and then contact your employer to claim your benefits.

Step 3: Reduce Your Bills

Did you know that it’s possible to have your major bills deferred or reduced?


Call your mortgage company to discuss the options that are available to you as a newly unemployed person.

They might offer to have your mortgage payments reduced or suspended for a set period.

Keep in mind that you’ll still have to repay the missed payments in the future, but by working out a plan with your mortgage lender, the risk of losing your home is at least partially mitigated.


If you have a decent relationship with your landlord, let them know your employment situation and come clean about the possibility of falling behind on rent in a couple months.

Be earnest about your willingness to find a new source of income as soon as possible, and offer to make up for the missed rent payments in the future, once you get back on your feet.

Your attitude and payment history as a tenant matter a great deal here. You need your landlord to find your claims credible.

If your landlord is understanding and business savvy, they would realize that it isn’t easy replacing a good tenant during a pandemic-fueled recession (what’s to guarantee that their next tenant wouldn’t be out of a job soon after moving in?) and that their best course of action might be to meet you halfway and devise a mutually beneficial plan.

But just to be on the safe side, find out what your rights are as a tenant anyway, in case your landlord threatens eviction. And start laying the groundwork to seek alternative housing arrangements, whether through a government program, or staying with a relative.

Credit cards:

Credit card companies often have financial hardship programs that waive fees or lower interest rates over a specific time frame. Call them up or visit their websites to learn about the application details.

Student loans:

Likewise, research and talk to the provider of your student loans and see if they would consider temporarily reducing or even pausing your monthly loan payments.

Step 4: Find Out How Much Money You Have

Now that you’ve done the leg work applying for benefits and reducing bill payments, let’s figure out how you can make the best out of the money you already have.

Start by adding up all the money you have immediate access to, which could include:

Once your government and employer benefits arrive, you can redo this calculation and update your personal cash ledger.

This number may not be pretty, but it’s something you absolutely need to know.

Step 5: Create a Bare-Bones Budget

You know how much you have. It’s time to figure out what you absolutely need to survive.

You probably already don’t have a ton of wiggle room in your budget, but it’s more important than ever to cut out all discretionary spending, and stick to a bare-bones budget.

Why such drastic measures are necessary: the less you spend, the more money you’ll have for future months.

If you have no clue what your must-pay bills are, review your spending in the last 6 months (you might want to download an expense tracking app like YNAB or Mint).

Your new budget will only include the bare minimums you need to survive (taking into account the reduced and deferred bill payments), listed in order of priority, like this:

  1. Housing – $1,000/month for 7 months ($1,250/month after)
  2. Utilities – $250/month
  3. Groceries – $300/month
  4. Minimum debt payments – $200/month for 5 months ($250/month after)
  5. Insurance premiums – $200/month
  6. Phone – $25/month (downgraded phone plan)

Based on the monthly total of this budget and how much money you currently have and expect to receive, you should have a clear idea of how long your expenses will be covered without a regular paycheck.

Step 6: Create Additional Income

Since we’re in a recession, naturally, it might take a while before a well-paying career opportunity lands on your lap.

In the meantime, find ways to make an extra buck if you can.

Not only will that lengthen your runway, so your money doesn’t deplete before the job market completely recovers, the peace of mind you gain from earning even a small paycheck is invaluable.

This is important even if you have a large enough emergency fund and don’t “need” the extra income. Having more money at your disposal will allow you to replenish your emergency fund faster.

Here are some income boosting ideas you could try:

  • Teaching English online
  • Selling your extra stuff on Craigslist or eBay
  • Getting a temp job
  • Becoming a virtual assistant
  • Delivering groceries to those in need
  • Writing for Casual Money Talk

You may only make a couple hundred bucks a month from these side gigs, but that’s enough to cover at least one bill and give you a little financial breathing room.

Step 7: Prepare for Your Next Career Move

Congratulations! You now have a defensive plan for managing your finances the best you can without a full-time job.

Next up, if you feel up to it, put your long-term thinking hat back on, and take steps to strengthen your career potential.

With a dash of diligence and a sprinkling of motivation, you will be able to resume your career seamlessly post-recession.

Here’s what you can do:

Update your resume and LinkedIn profile

You want your resume and LinkedIn profile to give the best first impressions to recruiters on your behalf.

Take the time to update them with your latest work achievements, and optimize them, so they accurately reflect the most capable and professional version of you.

Polish your social media presence

Make sure there isn’t anything eyebrow-raising on your social profiles that might make an employer second-guess your employability.

If need be, adjust your privacy settings and delete what’s necessary.

Start applying for jobs

It’s a tough job market out there, but don’t let that stop you from applying for jobs before the recession is over.

Be sure to tailor your resume and cover letter for each job application, highlight your most relevant work experience and skills, and make a compelling case for why you’re highly qualified for the role.

Learn new skills

Learning new skills doesn’t require you to take on student loans. Nowadays there is no shortage of free online courses on just about any subject.

Pick an advanced-level class that could refresh your skillset and advances your career, and consider adding it to your resume and LinkedIn profile after completion.

Gain more experience

Temping and volunteering are risk-free ways to gain work experience, especially when you’re literally starting from zero.

Also, realize that you don’t always need an employer to gain relevant experience.

For example, launching a blog is a great way to build a writing portfolio. Building a substantial following on Instagram makes it easier to get your foot in the door for a career in social media marketing.

Reconnect with your professional network

As a general rule, connecting with your network should be an ongoing effort — you wouldn’t want to be that person who only reaches out when they’re out of a job.

If you have free time on your hands, it doesn’t hurt to say hi and check in on people to see how they’re doing.

I wouldn’t recommend asking explicitly for job referrals at any point in the conversation, unless you’re talking to close friends.

People in your network are cognizant of your professional background, and keeping you in mind for relevant job opportunities by default. Just let it happen organically.

Line up your references

Speaking of network, your references are likely your most important professional contacts.

If you haven’t already, call your existing references, give them a heads up that you’re on the job hunt again, and confirm their availability to remain your reference.

Don’t forget to reach out to former bosses and colleagues you just parted ways with, and ask if they are willing to be a reference for you. Offering to reciprocate will get you far.

What to Do If You’re Running Out of Money

Depending on how long the ongoing crisis lasts and the strength of the economic recovery, there might come a time when your bank account is itching dangerously towards $0 despite your best efforts.

What would you do then?

Don’t panic. There’re still things you can do to fix your finances in the short term. Unfortunately, they all come with negative long-term consequences, big or small, and for that reason, these should be your absolute last resort.

Fix #1: Ask your housemates to contribute more

If you happen to live with a partner, adult children, or parents that are financially comfortable, ask if they’re willing to shoulder a bigger chunk of the household budget until you get back in financial shape.

Fix #2: Redeem credit card rewards points

If you’ve accumulated credit card rewards points in the past, redeem them for either grocery store gift cards or cash equivalents.

It might not be the most cost-efficient way to use those points. But who cares? Your survival is on the line.

Fix #3: Withdraw your investments

If you’re in dire financial straits, you could withdraw your investments.

Just know that selling your investments in the midst of a recession will likely result in a considerable loss of equity, in addition to the penalty fees for early withdrawal that you probably have to pay (if your investments are in tax-sheltered retirement accounts).

It pains me to type these words, as I know that this is the kind of financial move that greatly hinders people’s ability to grow wealth in the long run. So tread carefully.

Fix #4: Borrow

Last but not least, if you’ve tried all of the above, and are still hurting financially, borrowing may help fill the gap.

Your choices are:

  • borrowing from families and friends
  • borrowing from the cash value of your life insurance policy (if you have one)
  • taking on a personal loan
  • borrowing from a line of credit
  • borrowing from a zero-interest credit card

Ultimately, the choice depends on what’s available to you and the interest rate — pick the option with the lowest interest rate. 

Absolutely under no circumstances should you borrow from payday lenders. I could go on a very long rant on this topic, but let’s save that for another day.

Onward and Forward

Losing your job during a global recession is not your fault.

I know that things are tough right now, but this too shall pass. 

For now, just focus on making it through one day at a time, one task at a time, and one bill at a time, while giving yourself the best possible chance to come out ahead once the economic cycle is on an upward trajectory again.

I will try my best to be available if you need support. Find me on Twitter or shoot me an email.

We’re all in this together.

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Category: GeneralMoney For Beginners

One comment

  1. Thank you for giving the space for Step 1, take a breather, this is important for one’s mental health. You have to acknowledge the pain and find the strength to push through after that.

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Article by: Flora Pang

Flora Pang aspires to become someone who plants trees in their spare time, writes thank-you notes to strangers, and serves in UN peacekeeping operations around the world. But to date, blogging about personal finance remains her only contribution to society. You can catch her rambling about money on Facebook, Twitter, Instagram, and (to a lesser extent) Pinterest.