The 5 most important financial steps to take after a job loss

Whether it comes as a shock or part of a long-expected transition, losing a job can leave you feeling uncertain, anxious and overwhelmed — especially when it comes to your money. 

But here’s the good news: With a little planning and a few smart moves, you can regain control of your finances and build a stronger foundation for whatever comes next. 

From unemployment assistance to budgeting tips to protecting your health and savings, this step-by-step guide will walk you through five of the most important financial steps to take after a job loss — and how Empeople’s financial experts can help you make the most of each one. 

Step 1: Apply for unemployment, even if you think you won’t need it 

It might feel uncomfortable at first, but applying for unemployment benefits is one of the smartest financial steps you can take right away. These benefits are there to help you stay afloat while you search for your next opportunity, and while most unemployment funding comes from taxes paid by your employer, they’re a resource you’ve earned through your work. 

Even if you think your time out of work will be short, or you’ve got a decent emergency fund to fall back on, it’s still a good idea to apply. Every bit of income helps reduce the pressure on your savings accounts and gives you more breathing room to make thoughtful decisions rather than rushed ones. In some cases, receiving unemployment may also unlock access to additional support programs your state or former employer offers, like job training or reskilling opportunities. 

You can visit the U.S. Department of Labor’s job site, CareerOneStop, to find your state’s application site. The process usually requires: 

• Recent work history (employer names, dates worked, reason for separation). 
• Personal identification and Social Security number. 
• Bank information for direct deposit. 
• Weekly or biweekly certifications that you’re actively seeking work. 

It’s worth taking the time to gather your documents and apply promptly. Some states take a few weeks to begin payments, and others require regular check-ins to keep your claim active. 

Step 2: Make sure you have health insurance in place 

When you’re focused on staying debt free, paying bills and searching for your next job, it’s easy to overlook one of the most important things to protect: your healthcare coverage. But a single medical bill without insurance can derail even the most carefully built budget. 

Depending on your situation, you may have several options: 

• COBRA coverage: This allows you to temporarily stay on your employer-sponsored health plan after losing a job, though it’s often expensive since you pay the full premium. 
• Spouse, parent’s or partner’s insurance: If their employer offers coverage, this may be a more affordable option. 
• Marketplace plans: The health insurance marketplace at HealthCare.gov or your state’s marketplace lets you compare tax-advantaged plans, often with subsidies based on your new income level.* 
• Medicaid: Depending on your income and state, you may qualify for free or low-cost health coverage. 

Whichever route you choose, the most important thing is to avoid a gap in coverage. Even a short lapse could leave you vulnerable to unexpected bills — or make it harder to get treatment if something comes up during your job search. 

If you’re already cutting expenses, this may feel like one more cost to absorb, but budgeting for health insurance now can help protect your financial goals. 

Step 3: Build your budget based on what you have today 

Once you’ve applied for unemployment and addressed your health coverage, the next step is getting a clear picture of where you stand financially. Building a budget may sound intimidating, but it’s really just about answering a few key questions: What do you have? What do you need? And how long can it last? 

Start by taking stock of your current resources: 

• How much do you have in savings? 
• What other sources of income can you count on, such as unemployment benefits, severance pay or support from a partner? 
• What’s your average monthly spending — and how much of that is absolutely necessary? 

Then break your expenses into categories: 

• Fixed and necessary costs: Mortgage or rent, utilities, debt payments, insurance. 
• Variable but essential spending: Basic groceries, gas, household items, cell phone, childcare. 
• Discretionary spending: Dining out, subscriptions, entertainment, extras. 

To get a realistic view of where your money goes, look through recent credit card statements or bank transactions. You might spot patterns or surprises — like a forgotten subscription service or takeout habits that can add up fast. 

This kind of review also helps you prioritize. If you’ve been meaning to start saving, this is the moment to get intentional. Whether you’re working toward an emergency fund, staying on top of student loans or protecting your retirement accounts, a budget helps you stay in control. 

Step 4: Look for ways to cut back — at least for now 

Once you’ve built your budget, the next financial step is adjusting your spending to reflect your new situation. That doesn’t mean giving up everything you enjoy, but it does mean identifying areas where you can cut back, even temporarily, to make your money stretch farther. You can even view how your daily spending impacts your overall financial health with our spending calculator. 

Start by revisiting your expenses and sorting them into three groups: 

• Must-haves: These are essentials like housing, utilities, groceries and minimum debt payments. 
• Nice-to-haves: These are things you enjoy, but can pause for now, like subscription services, streaming platforms or online shopping. 
• Meaningful extras: These are not essential, but worth keeping if they support your well-being, such as a gym membership you use regularly or a child’s soccer league — the kind of things you may have to find cheaper alternatives to or cut in extended unemployment after a job loss. 

Reducing your monthly expenses gives you more time to find the right next step — not just the fastest one. And remember, these changes aren’t forever. You can always add things back in once you’re back on solid ground. 

Finally, if you’re worried about falling behind on essential bills, it’s better to be proactive: 

• Contact lenders or service providers early to ask about hardship programs or temporary relief. 
• Explore deferment options for student loans. 
• Consider switching to minimum payments on credit cards if needed (but keep interest in mind). 

Even small changes can make a big difference. Canceling an unused subscription or adjusting your grocery budget could help you preserve your emergency fund. 

Think of this phase as a reset — not restriction. It’s about protecting your financial foundation so you can rebuild stronger. 

Step 5: Find other sources of funding — but use caution with long-term assets 

If your savings and unemployment benefits aren’t enough to carry you through a job loss, you’re not out of options. Now’s the time to look creatively and carefully at other ways to bring in money or free up cash flow without putting your long-term financial health at risk. 

Start with short-term strategies: 

• Side income: Temporary work, freelancing or gig opportunities can help bridge the gap. 
• Sell unused items: Furniture, tech or hobby equipment could turn into quick cash. 
• Check with your network: Part-time, contract or consulting work might be closer than you think. 

If you still need more support, consider these funding sources — but weigh the risks carefully: 

• Home equity loan or line of credit: If you own your home, this can offer a lower interest option compared to credit cards, but it puts your home at risk if you fall behind on payments. 
• Personal loan: May be useful in an emergency, but watch for fees and make sure the loan amount and terms are manageable. 
• Retirement accounts: Try to avoid withdrawing from your retirement plan unless absolutely necessary. Early withdrawals can trigger taxes and penalties and you lose out on future growth for your retirement savings. 

If you’re unsure what to tap into first — or how to protect your long-term goals — it may help to talk through your options with someone you trust. Empeople’s financial experts can walk you through your choices one-on-one, so you can avoid costly missteps and protect what you’ve worked hard to build. Personalized ongoing financial guidance is a complimentary service for Empeople members with an active checking account.  

Remember, you’ve got options to get you through 

Job loss can shake your confidence, but taking a few smart financial steps can help you regain control and move forward with clarity. From applying for benefits to building a realistic budget and protecting your health and savings, the actions you take now can make a lasting difference. 

Whether your goal is to stay debt free, protect your retirement savings or simply get through the next few months without added stress, the most important thing is to keep moving forward — and to ask for help when you need it. 

*Tax laws are subject to change. Contact a tax advisor for more details.