It is something that we never think will happen to us and when it does it comes as a deep shock. Nearly 60 per cent of Canadian workers live paycheck to paycheck with little buffer for any major financial crisis in their lives. Add to this that most Canadians are also carrying significant amounts of debt then the sudden loss of a job can be catastrophic for anyone in any situation.
Whether you are downsized, company difficulties or you get fired the result is the same. You can no longer rely on that income stream to pay for the mortgage, the car, and the ever-increasing cost of food.
First thing to do. Take a breath. It will be okay. Most people will experience this in their lifetime and often (I know its cliché) when one door closes another one opens. Panicking in this situation is not good for you or for your family. You need to keep a level head and think about the next steps to take once you get the news. Take a few days after you leave work for the last time and relax. Think of it as some time off to get your head together and regroup for what is next to come.
It is more than likely that you qualify for some sort of severance package from your employer. If you were not terminated for reasons of gross misconduct, then an employer is obligated to pay out a severance to terminated employees. Depending on the length of time that you were employed, your age and your salary you could receive a nice buffer until you find your next source of steady income.
Check with an Employment Lawyer
One of the first steps after termination I suggest to all is to meet with an employment lawyer and have then review your termination papers. Do not sign anything immediately! You might be pressured into signing the termination papers by your former employer, but you have the right to seek legal council.
Most employers do not want to be shelling out all kinds of money to former employee and it is in their best interest to have you sign an offer and be done with you. But there are legal loops and language in termination papers that need to be looked over. What might look like a fair settlement to you right after your termination with all the bills on your mind might not be what you are entitled to. This could mean the difference between a few thousand dollars and that matters when it is never certain how long it will take to find new employment, regardless of your employability. The cost of a good lawyer is just a few hundred dollars but that could mean money very well spent if your employer has shortchanged you in what the owe you by law.
Don’t forget also, are there any outstanding entitlements coming to you? Unused vacation pay and expense reimbursement are standard. Your employer may also arrange for continuation of medical/dental benefits, an education allowance, and job search counseling. You have rights even at this point in your relationship with your employer.
One of the first things you are going to do is apply for Employment Insurance. Hopefully you won’t end up needing it before the severance runs out but you will want to get all your information into the government just in case you do. There is no need to wait for your employment record. Get your name into the government system as soon as you can. It is an incredibly easy process to go through and can be a lifesaver in case you need it. We all pay taxes for a reason and there is no shame in needed to access this help.
There also might be other programs you can take advantage of depending on you home province. There are retraining programs available if you had been thinking about making a career change, free language courses, and resume and job search skills training as well. When you lose a job finding another one in a sense becomes a full-time job. Don’t sit back and wait for things to come to you.
Once you’ve seen the lawyer and you have applied for E.I. it is time to sit down and take an honest look into your finances. You may or may not be liberal in your politics but now is the time for fiscal conservativism. You need to look at the numbers and estimate the longest period of time you think you will need to finding work.
Track everything you spend. From the day you sit down to look at your finances, start tracking what you spend. Keep all receipts and markdown all bills. Then once you have a one-month picture of your expenditures sit down with everyone in your household and take an honest look at what is essential and what can be saved. The job of your dreams might be around the corner but until that first new paycheck comes in it is best to anticipate for the long haul. Look at that upcoming vacation you had been saving for, do you really need to buy Starbucks every and other needs vs wants. This might be a humbling experience, but your loved ones will understand and want you to succeed in the end.
Remain in good credit
The goal is simple. Keep paying the bills and do not fall into arrears. You want to come out of unemployment intact. If things get difficult and its looking like finding work might take longer seek proper professional financial advice. A professional will help you figure out all the ways you can remain in good standing and come out of this period financially secure. Professionals can offer you valuable advice regarding a variety of potential solutions such as mortgage refinancing, using part of your RRSP, negotiating with creditors, credit counselling and consumer proposals.
Remember, you are not alone. This is a temporary bump in a long life. Get out and remember to enjoy life. Things will get back to normal. It will be okay.