The days and weeks of watching and worrying have finally come to an end. Your worst fears have been realised – your name is on that dreaded layoff list. In an instant, your occupational status has been altered. You have joined the increasing ranks of the unemployed.

Being laid off can be a traumatic experience. Anxiety about the loss of a steady income, coupled with feelings of rejection and unworthiness can send some newly laid off persons into depression and despair. For others, a job is really more than just a bill-paying source, it helps to define them and give them a sense of purpose.

As with any other negative event in life, the way to survive a job loss is to adjust your attitude and adopt a positive outlook. If you allow the circumstances to overcome you, you will not be able to see the opportunities that exist within every challenge. Despite the situation, you must always keep hope alive that better days will come.

If you have recently lost your job or you fear the advent of the unemployment line, here is a seven-step guide to help you to recover from redundancy:

R- Review your financial situation

To find out where you stand financially, you have to become brutally honest with yourself. Take a hard look at your expenses by filling out a detailed budget. Download a personal spending plan and cash flow calculator from www.financiallysmartonline.com and use them to tally up all the money that you have been spending. If you have debt, use the debt tracker form to outline your total obligations. Knowing these details will help you to make the right decisions for the future.

E- Eliminate unnecessary spending

Once you have laid out your current spending patterns, use your budget to differentiate between compulsory expenses such as food, rent and utilities; and non-essentials that you can temporarily do without like cable TV and entertainment. Your objective should be to trim down your monthly spending to the bare necessities, until you have established another income source.

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C- Cut down monthly obligations

It’s very important to have few obligations that will pressure you financially. With no regular salary, the last thing you need is creditors calling you for overdue bills. Make every effort to reduce your loans, hire purchase agreements, and credit card balances with your redundancy cheque. If your lump sum isn’t sufficient to clear your liabilities, contact the lending agencies to let them know of your problem, and try to reschedule payments if possible.

O- Opt for short-term investments

If you’re lucky enough to be debt-free, then you will have to decide how to invest your redundancy proceeds. Some people will be tempted to jump into long-term or riskier investments, with the hope of getting great returns to bring in much-needed income. It’s best to keep your money in short-term accounts, especially if you didn’t have an emergency fund before. You can still earn reasonable returns in a money market account or 30-day investment, so don’t leave your funds in a low-interest savings account.

V- Venture out in business

Getting a new job immediately might be challenging, so you will have to get creative in bringing in money. After you have whittled away at your budget, you will have set a target amount to earn every month to make ends meet. Think about problems and needs that may exist in your community and environs, and consider ways that you can use your talents and ideas to solve them for profit. Stay away from persons who may come with get-rich-quick earning ideas.

E- Explore career options

Being laid off can actually give you the chance to get rid of a job that you didn’t really like and focus on creating a fulfilling career. If your previous job was in an industry in downturn, look around for other occupations that may still be in demand. Get help from a career counsellor if necessary. If you have the financial ability, you could go back to school and get trained in a field that will offer better stability and rewards in the future.

R- Rest and re-evaluate

It’s important to take a few days to recuperate from the shock of your job loss, as it’s hard to think clearly when you’re feeling stressed out. If you have a big enough financial cushion, take a mini-vacation and spend some time charting the right course for your financial future. Even if you have to hit the ground running immediately after being laid off, try to create a space where you can relax and review your options. It’s also helpful to have supportive persons around you in the midst of this financial challenge.

So, your layoff doesn’t have to leave you down. Make every effort to think positively, act decisively, and seize the opportunities!

Copyright © 2009 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, February 5, 2009

Cherryl is a financial consultant and coach, founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl