As recently as a generation ago, many careers followed an iron-clad path: you found a good job, worked 40 years in that job, and retired with a gold watch and a pension. These days a career path like that is nostalgic at best – today’s worker can expect to change jobs up to 12 times before finally leaving the workplace entirely.
Still, sometimes a job change is triggered by a company layoff or closure. A job loss can trigger a major lifestyle change, and it’s typically accompanied by a strong emotional component that you may not expect. Understanding that there is more to a job loss than the nuts-and-bolts of 401K transfers and COBRA rules can help you to manage this important life transition.
Job Loss and Understanding Your Emotions
When you find yourself at the crossroads of a job loss, it’s normal to feel upset or fearful at this turn of events. Loss of a job is among the top ten most stressful life events, according to the Holmes-Rahe Stress Inventory scale. Job loss can trigger a grieving process that follows similar patterns to that of loss of a loved one.
- Shock/denial – You may find yourself refusing to accept the loss, with an underlying hope that this is all a bad dream. Such denial can keep you from moving on into a new position.
- Anger – This is the stage at which a job loss feels the most personal. The circumstances of your job loss may feel unfair, and you might feel as if your contribution to your position wasn’t valued by your former employer.
- Bargaining/Desperation – Also known as “panic,” this stage can lead you to jump into a job search that’s devoid of a clear plan toward success. If you’re applying for any and every job you can, you’re diluting your search with positions that you may be over- or underqualified to fill.
- Depression – You’ve lost your job, you have bills coming due, and you may be having trouble landing a new position … the perfect atmosphere for depression to set in. It’s at this stage that you begin to doubt your skills and abilities, and fear that better days might not come.
- Acceptance – If you’ve managed to work through the other stages listed above, you can arrive at this stage with a sigh of relief. Realizing that you can find another job that allows you to use your talents and take care of your family is part of the acceptance process. You may never feel great about the trial you had to endure, but acceptance of the situation can help you to move forward with confidence.
Throughout this emotional process, it is crucial to stay disciplined with your financial life planning and be able to trust a skilled team of advisors – because one day, you’ll want to enjoy a post-work life and still be able to leave a legacy.
Combatting the Emotional Fallout
For many, a job is how they measure their personal value, and the loss of employment can affect their view of themselves. Understand, too, that men and women react differently to job loss; men tend to feel a loss of identity, while women feel a loss of security. Combatting the emotions that follow a job loss can be difficult, but it’s worth the effort to take the long view on the situation.
- Make a plan – Job seekers who develop a plan for finding a new job can move through the process with more confidence.
- Recognize when you’re stuck – if you have trouble moving past one of the above stages, just being able to recognize it can be the kickstart you need to move forward. You may be able to take advantage of networking groups or participate in programs offered by your former employer to help you find a position elsewhere.
- Resist temptation – Whatever form it may take, temptation to continue spending money like you are still receiving a salary can do a lot of long-term damage; rein in your expenses, create and stick to a budget, and whatever you do, don’t tap into your 401(k)!
- Rediscover yourself – The period following a job loss can be a good time to pick up old hobbies or interests; spending time engaged in activities that interest you can give you a much-needed break from your job search.
- Keep your sense of humor – Realize that most likely, this is just a bump in the road career-wise.
If you’ve been affected by a recent layoff or job loss and want to make sure you’re doing the right things financially, a conversation focusing on financial planning for the present and the future is a step in the right direction.
Published: March 9, 2016
Author: Ann Pendley, CFP®
Phone: (812) 602-6304
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The information in this material is only as current as the date indicted, and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. While all information prepared in this document is believed to be accurate, any statements of opinion constitute only current opinions of Payne Wealth Partners, Inc., which are subject to change and which Payne Wealth Partners, Inc. does not undertake to update. Accordingly, you should not put undue reliance on these statements.