Going through a job loss or financial hardship can be incredibly stressful. Not only does it create a strain on your finances, but on your mental health as well.
Now more than ever, it’s become clear the toll that financial hardship can take. People have lost their jobs during the pandemic in numbers not seen since the Great Depression. And these setbacks left many people wondering how to recover.

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When we spoke with Baron Davis, Personal Capital’s Chief Financial Literacy Ambassador and Financial Hero, he talked about overcoming a stressful financial time. Baron was forced into early retirement after a knee injury ended his basketball career. But he didn’t let that setback stop him.
“There’s nothing wrong with hitting the ground and bouncing back up,” Baron said. “Financial literacy will put you in a position to drive when that opportunity comes.”
While being laid off or going through any other stressful financial time can feel overwhelming, you are capable of hitting the ground and bouncing back, both financially and emotionally. And we’re sharing some tips to help you get started.
Know That You Aren’t Alone
Losing your job or going through any stressful financial situation can feel isolating and lonely. Those going through a personal financial crisis often feel embarrassed. Remember that we live in a society where people are more likely to share their wins than their losses. But plenty of other people are going through experiences like yours. And during a pandemic especially, know that a job loss of financial stress isn’t a sign of a personal failing, but rather unavoidable circumstances.
Work Through your Emotions
Financial stress is as much an emotional burden as it is a financial one. Money is already one of the most significant sources of stress for people, and this is all the more true when it comes to job loss or a financial crisis. If you don’t work through the emotions surrounding your finances, you could end up with mental and even physical health repercussions. You can start by opening up to friends and family or talking to a mental health professional about your stress.
Dealing with your emotions also means making time for ongoing self-care. While it might seem counterproductive to make time for self-care during a financial crisis, it’s essential for your mental health. So continue to eat well, move your body, make time for relaxation.
Take Stock of Your Financial Situation
One of the very first steps to take after losing your job or going through any stressful financial situation is to take stock of where your finances are. Doing so will help you to make a financial plan moving forward. Make a list of things like:
- Any remaining income
- Your monthly expenses
- Your debt
- The amount of money in savings
You can use Personal Capitals free tools to help you clarify your monthly cash flow, debt, and current savings.
Determine What Benefits You May Be Eligible For
If you’ve lost your job, you may be eligible for supplemental benefits to help you get through this period. Start by talking to your employer and asking if they offer any severance for laid-off employees.
Next, consider what government benefits you might be eligible for. Read up on your state’s unemployment laws and determine if there’s a waiting period to apply. You can also look into what health insurance options are available to you. If you currently don’t have income, you may be eligible for subsidized health insurance through the federal or state marketplace.
Create an Emergency Budget
If you’ve lost a source of household income or are confronting a major financial emergency that’s eating up some of your income, put together an emergency budget.
An emergency budget is a stripped-down version of your monthly budget. It maintains any necessary spending while eliminating unnecessary expenses. An emergency budget contains only the minimum expenses you need to get by.
Contact Your Creditors
If you fear you won’t be able to pay all of your monthly bills, start calling those you owe money to. During the pandemic, many lenders have put programs into place to help borrowers facing financial hardship. If you’ve lost your job, you may be able to defer payments for rent, mortgage, credit card bills, and more.
And if you’re one of the millions of Americans who owe money on student loans, contact your loan servicer. Federal loans have a mechanism for borrowers to request a forbearance, meaning you can temporarily pause your payments. Even if you have private loans, there may be a way to put your loans into forbearance until you get back on your feet.
Seek Out Free Financial Services
Many local governments and nonprofit organizations facilitate free financial coaching programs to match coaches with individuals facing financial hardship. If you’ve lost your job or are otherwise struggling financially and aren’t sure where to start, a financial coach may be able to help you create a financial plan.
Adjust Your Financial Plan
Facing financial hardship doesn’t just impact your current budget. It could also throw a wrench into any future financial plans you have in place. Here are a few ways to get started:
- Use Personal Capital’s Retirement Planner to see if you’re still on track for retirement. If you have to postpone contributions during a period of unemployment or financial stress, you may need to increase your contributions in the future.
- Take a look at your debt accounts and see how you can jump-start your debt payoff once things start to get back to normal.
- Look at your other savings accounts and see if you can reroute any funds to your monthly expenses. If you have money set aside for any large financial goals, you could temporarily redirect those funds with the intention of replacing the money later.
Set a Financial Plan to Bounce Back
Personal Capital compensates Erin Gobler (“Author”) for providing the content contained in this blog post. Featured individuals are paid spokespeople and not clients of PCAC and do not make any endorsements or recommendations about securities offerings or investment strategy.