Aside from not receiving a paycheque, you also suffer the loss of your personal work relationships, daily structures and an important sense of self-purpose when out of a job (Getty Images/Westend61)
The ongoing COVID-19 pandemic has completely shocked the Canadian labour market. In March and April alone, more than three million jobs were lost due to the economic shutdown, according to Statistics Canada.
But if you’re among those affected, the impact goes beyond statistics. Job loss can result is serious financial and emotional hardships. And, with the pandemic causing so much uncertainty, being out of work can be particularly frightening.
In the past, there were standard recommendations when you lost your job, says CPA David Trahair, a personal finance expert and author of CPA Canada’s free practical guide, Survive and thrive: Move ahead financially after losing your job.
“It’s a totally different situation now,” says Trahair, who has also led webinars on the topic. “Nobody really operates well in an environment where you have no idea what’s going to happen in the future. That’s why this is so devastating.”
Here are three tips to help you deal with a sudden job loss during the pandemic.
1) UNDERSTAND THE EMOTIONAL TOLL
You lose more than just your paycheque when you lose your job. As the Canadian Mental Health Association points out, you also suffer the loss of your personal work relationships, daily structures and an important sense of self-purpose. You might experience the same feelings and stresses that come from other forms of loss.
Recognizing that losing your job can cause you to experience the feeling of grief is an important idea for people, says CPA Melanie Schroeder, a B.C.-based holistic accountant, coach and counsellor.
“‘Why me?’ is often a question that is asked and has no answer in this situation,” she says. “We have no control over a global pandemic.”
Schroeder brings up the Dual Process Model of Grief, where one alternates between grieving and coping. During the grieving, you can expect to feel things like anger, sadness and denial. While you are coping, you are learning to live with your new circumstances.
Some institutions offer free online programs that help with mental-health issues, including negative emotions. And Schroeder suggests that anybody who feels overwhelmed reach out for help, which can include counselling.
“Our ultimate goal is to find some benefit out of our loss,” she says. “Whether that is finding new, more meaningful work, reinventing ourselves, or spending more time with friends and family, the ability to find a benefit will help you feel more at peace with the loss.”
2) FINANCE YOUR LIFE
When you’re suddenly without a paycheque, the thought of not having enough cash to pay the bills is likely to cause significant stress. Typically, the advice has been to save somewhere between three to six months of expenses in your emergency fund. But very few people actually do that, says Trahair, so you might need to look at your other options.
“Everybody is different,” he says. “Our personal financial situations are as individual as a fingerprint. The best thing you could possibly do for your personal finances, whether you’re trying to get out of debt, plan for your retirement or get through COVID-19, is to track where your money is going. Whatever you track tends to improve because you’re focusing on it.”
But where are you going to get the money to buy groceries and other essentials? Make sure you’re aware of financial and economic support from the federal government, namely the Canadian Emergency Relief Benefit. Trahair says, if you do have retirement savings, or a TFSA, you’re probably going to have to tap into that. RRSP withdrawals are taxable but, if you lost a job in March, and have no income for the rest of the year, you’re not going to lose much on RRSP withdrawals, he says.
“For people who don’t have savings of any kind, then it gets to be about debt structure. Credit cards are the last resort because the interest is so high,” he says. “People in pretty good financial shape with a home, I’ve always recommended that the best emergency fund you can have is an unused line of credit.”
If you have a home equity line of credit, that’s the lowest interest rate you can get, says Trahair, adding that he considers it the most optimal debt to use to finance this unusual period. You should also understand how the credit system works and what you can do to improve your score.
3) FIND FUTURE EMPLOYMENT
There’s no end to the amount of helpful job search tips that are out there, whether about the importance of networking or boosting your LinkedIn profile. But we’re in unprecedented territory when it comes to finding a new job during a pandemic.
“The conclusion I’ve come to is that it’s not the strongest or the smartest that are going to get through this. It’s those that can most easily adapt to change,” says Trahair. “Look at the profession or the job that you have and think about what the future prospects are. The opportunity now is to expand your skills into areas that are going to be in demand or are going to be common going forward.”
Many people consider going back to school or retraining to be one of the best options in times of unemployment, though that could depend on your financial situation or stage of life.
“[Finding a new job] will be hardest for older employees in a market where there is more competition,” adds Schroeder. “Us older workers need to remember that we have an important asset that the younger generation doesn’t have yet: experience. We need to find a way to capitalize on that.”
She says that includes contract work, such as offering assistance to smaller firms that may need someone experienced but not full time.
MORE FINANCE TIPS AND COVID-19 UPDATES
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