5 Money Moves to Make ASAP If You Lose Your Job

Whether that pink slip comes as a total surprise or departmental layoffs have been looming for months, losing your job sucks—emotionally, professionally, and financially. It’s also incredibly common: Roughly 13 percent of U.S. workers think getting laid off is very likely or fairly likely to happen in the following year, according to a recent Gallup poll—and for workers under 29, that stat jumps to 18 percent.

“Going through these rough job transitions is totally normal, and most Millennials will go through it more than once in their careers,” says Sophia Bera, a certified financial planner and founder of Gen Y Planning.

Of course, going from making bank to making bupkis is enough to make anyone freak out—no matter how many times you’ve done it. But losing your job doesn’t have to spell financial ruin (or a diet of ramen noodles). The trick is to be proactive about slashing spending and stretching savings—as soon as you get the bad news. Here are the money moves to jump on:

1. FILE FOR UNEMPLOYMENT.

Let’s be real: Unemployment benefits aren’t going to cover all of your expenses. But now is the time to claim every penny of help you’re entitled to. The benefit formulas vary by state, but most are based on a percentage of your former salary, with a maximum weekly benefit. In Illinois, for instance, someone without kids will receive at least $50 a week and at most $426. In California, the range is $40 to $450 a week. Every state has its own website detailing how to apply for benefits, as well as who to contact with questions. Get clicking.

2. SHELVE YOUR STUDENT LOANS.

While you’re unemployed, you can put any federal student loans into deferment—that means you’ll be able to halt payments entirely until you find a new gig and the government will pick up the tab on any interest that accrues. Private student loans probably won’t be quite so generous, but you might be able to switch repayment plays so you’re paying less each month or move the loans into forbearance until you find work.

“People sometimes wait until they can’t make the monthly payment to call their student loan providers, but the last thing you want to do is default on your loans,” says Bera. That money blunder can wreck your credit and cost you even more in hefty fees and penalties.

3. CALL YOUR OTHER CREDITORS.

If you have a car payment or a credit card bill, jump on the phone and explain your situation. “All loan providers want to get paid, so they’re motivated to work with you to figure out a payment plan,” says Bera. “The first person you talk to might not have the authority to change the bill’s cycle length or lower your minimum payment, but if that’s the case, ask to speak with a manager.”

4. FIGURE OUT HEALTH INSURANCE.

COBRA is a short-term solution that lets you continue with your company’s chosen healthcare plan, typically at a higher monthly premium. But ponying up for COBRA isn’t always the best money move. If you’re younger than 26, you might be able to sign on to your parent’s insurance instead. (And if they’re already carrying your younger siblings, the add might not even cost them a premium increase.)

If you think this layoff might signal a good time to start a freelance business, you might want to comparison shop for coverage on your state’s Health Insurance Exchange. And even if you do find that COBRA is your best bet, there’s no rush. “You have 60 days from the day you lose your job to elect for COBRA,” says Bera. “And you can back-date coverage if something does happen, so for most people hoping to find a job right away, it makes more sense to wait.”

5. TIGHTEN YOUR (BUDGET) BELT.

Scrutinize your budget and cut out anything that’s not totally essential. That might mean swapping your pricey gym membership for free runs in the park or cutting the cable cord in favor of a Netflix subscription you split with your roommate. “Taking a serious look at your spending might also prompt you to make some tough choices, like not going to your friend’s wedding this summer,” says Bera. “Your friend might be mad at you at first, but tough. This is life, and s**t happens. It’s not worth putting a destination wedding on your credit card—especially if you don’t have a job.”

One unexpected perk of paring down your spending, she says, is that you might find you don’t miss the daily splurges nearly as much as you thought you would. That means when you do land your next job (and you will!), you can stick with the pared down budget and bank more of your new salary for savings.