When is it too late to file for unemployment after losing your job
I Lost My Job. Now What? How to Prepare for Unemployment
hi everyone thanks so much for joining
us i'm claire obusan
senior editor at bloomberg quick take
and today we're going to talk about
jobs um really staggering
jobs report that came out this morning
in the us
uh 20 and a half million jobs lost 14.7
percent
unemployment i mean the superlatives
just keep coming
and but you know really behind
all these numbers there's a there's an
individual behind all these numbers and
it's a scary time for a lot of people
so we thought it would be a good time to
have a conversation
around job loss job security
personal finances given that these are
topics that are top of mind
for so many people right now and so i
want to begin today's conversation with
a couple of guests
so we first off we have alexis leondis
she's a columnist
at bloomberg opinion and she covers
personal finance and
previously alexis wrote about personal
finance she led our tax coverage at
over at bloomberg news now also joining
us from los angeles is kay
he he's the creator of rad reads and
also a consultant coach online
instructor who writes extensively about
personal finance
career pivots transitions and the
psychology of money
so thank you both so much for joining us
today on this on this
topic so alexis i want to start with you
um the title of
uh one of your most recent columns which
is what we're calling the the q
a today here's what to do before you
lose your job
it was pretty attention grabbing what
prompted you what prompted you to write
write it
um well i felt like there was a lot of
information out there for people who had
already lost their jobs and a lot of
really helpful information about you
know what to do in terms of filing for
unemployment benefits
and so forth but there wasn't that much
out there about what to do if you're
kind of in
what i'm calling like employment
purgatory you still have your job but
you feel like you could be the next shoe
to drop
and who knows if that's going to be in
six weeks or six months but obviously
with the job numbers that we're seeing
it's clear that we're seeing second and
third waves and the second and third
waves you know
could stretch into other sectors whether
they're like the first wave was
obviously more focused on hospitality
leisure frontline workers
the second and third waves according to
economists are going to focus more on
the people who are at the managerial
level
or just in other sectors and they're
part of the supply chains that supply a
lot of the industries that are getting
hammered
um so for all of those reasons i thought
it was really prudent to write a story
and target
it for people who still have the
resources of their employer they're
still gainfully employed
and give them some tips and advice on
what to do
while they're still employed to take
advantage of those resources before it's
too late
essentially so let's get into that a
little bit um
talk us through these steps that you
mentioned like
what are some of the steps that people
can take right now
in anticipation of any job loss for low
anticipated cut in some form of
compensation
talk talk to us about some of the things
that you laid out sure the first step is
really basic i mean it's common sense
um you just have to know what you have
and you have to know what you're
spending
um but when you're trying to figure out
the former a lot of people if you ask
them how much they actually make you
know thanks to things like direct
deposit you know a lot of us don't know
exactly what the bottom line numbers are
so for those reasons it's really helpful
to make sure you're looking at your pay
stubs you're checking out you know with
holdings
all that stuff to find out what you're
actually taking home you know bi-weekly
or monthly whenever you get paid
um and it's really important if you're
lucky enough to hold on to restricted
stock units
or you have some kind of deferred
compensation plan to get a sense of if
you're terminated
how do those plans work so exactly what
will you get
you know when you walk out the door um
so that's the in the first bucket of
what you're
making what you have one other thing
that i heard from a lot of people is
that you know many of us have had
different jobs at different employers we
may have retirement accounts at
different retirement accounts of
different employers that we've totally
forgotten about
so when you're making that list of what
you have you sure you're being really
comprehensive
and including some of those things you
may have forgotten about and then on the
other hand you're you want to get a
sense of what you're spending and you
know what your monthly outlays are
and i think it's generally very helpful
to put those those outlets into two
buckets discretionary spending and
non-discretionary spending
um and in the column i note that some of
the expenses that you've previously
thought of as
mandatory expenses that are
non-negotiable thanks to the cares act
that may have changed you know there's
mortgage forbearance
if you've lost your job or had some kind
of serious reduction in income
there's also deferral of student loan
payments so a lot of different things
that may be available to you
um so it's really important to make sure
you understand the provisions in the
cares act
when the expiration dates are of those
provisions are to get a better sense of
what you know discretionary spending is
versus non-discretionary
and then for the discretionary spending
you know all of us are probably
relying on takeout and other kinds of
things which are obviously very
important
to help keep our favorite restaurants in
business but those expenses add up so if
you're really concerned about having a
big change in terms of your
income then it's important to take a
look at those things
okay i see you nodding i know this is
something you've written so much about
um you know talk you know tell us like
you know you you
and you know and you know for for our
audience also tell us a little bit about
like
your experience you know i'll let you
describe it in your own words but
kind of going from you know a corporate
job into being self-employed and like
having to really reevaluate your your
situation um tell us a little bit about
that
absolutely and so you know i i think
back to this time because 2008 i was in
my 30s
and so the these like having lived
through two crises i'm like okay
i think i've seen this before except in
one i had health insurance a paycheck
you know a structure and in this uh in
this kind of second phase of my life
i've been a solopreneur
a digital creator you'd say for uh
almost
five years now and so you know i had
always
uh embraced that i joke or i i implore
my
my readers to always have the two
numbers that they talk about and
actually
with their partners and just having
their head and it jives with what alexis
said it's like
what are the what's the spending that
you could cut overnight
and you'd be amazed with the number of
uh of people
that have no idea that well-employed
smart
financed people who have no idea how
much they spent in 2019 so that's the
first number
that's more of a defensive number and
then the second is like an offense
number
and the offense number is if you could
just kind of categorically look through
your brokerage accounts
and say i have 50 of my life exposed in
stocks
what would happen if those were down 40
50 just pick your favorite crisis
and just know right away okay if it's
you have 50
of your assets and equities and it's
going to lose 50
you're going to wake up one morning and
you would have lost 25 of your net worth
how are you going to act in that
situation do you regret buying that
house in that situation
and so again they're just like quick
little heuristics so that when the
moment comes right a crisis will come
another one will come
you're you're kind of prepared to at
least you're mentally prepared for
uh for what's going to come from it
so i just want to bring in we're just
getting a question right now from the
audience and so i'm going to pose this
to alexis first and
k feel free to weigh in and so the
question is if i get
get laid off what should i do with my
401k
sure so there are two things to keep in
mind the first is that under the cares
act
um so typically pre-cares act if you
were to take a withdrawal before you're
59 and a half from your 401 k
it generally comes with a 10 penalty so
obviously it's a way to prevent people
from doing that
except in dire situations under the
cares act it weighs that 10
penalty so you can actually take a
withdrawal um
if you need to set up you know an
emergency fund or have
extra savings built up because you
anticipate you're going to lose your job
or you already have
you can basically again take that
withdrawal up to a hundred thousand
you have to repay it within three years
but you won't be hit with that 10
penalty so that's one thing the other
thing um some of the advisors that i
spoke to for my column
highlighted is that think about what the
balance is of that 401k
and if you have more than five thousand
dollars in your account
then you actually can leave it there you
don't have to take it with you right
away
and a lot of advisors suggest that
that's actually a good thing because
often what happens is
people pull the money and then they
don't reinvest it right away
and they miss out on some of the market
rebound so for those reasons
you want to think about what the balance
is and if it's over a certain amount
potentially keep it there until you're
ready to roll it over to an ira so you
don't miss out on any market upswing
okay
oh yeah i would add just one quick thing
is
you know in claire's introduction she
said i write about the psychology of
money so
alexis will cover the logistics of the
cares act and all that
but i think that psychology is think
about the like
are you doing it because are you
redeeming it because of
fear uh like market fear bear market
fear
uh are you doing it because you actually
need the cash
and those are going to be two very
different considerations
you might get so caught up in the
whirlwind and the fear right genuine
fear
of what's happening right now that
there's famous three words in investing
this time it's different you know as a
41 year old having lived through three
bear markets like
trust me everyone was different uh and
so
i would just like encourage you to kind
of um check yourself
in in a kind and compassionate way that
you are doing this because you
fundamentally need the money which leads
to the first point like
you know what your spending is your burn
rate is or
is it are you caught in the emotion and
the uh
of the moment and that might you might
want to take a few deep breaths before
you liquidate for that second reason
awesome that's really great um and so i
i just want to also bring up another
question um open to either of you if you
want to take it um
so the question is coming from our
audience and it's a and person's asking
and this is actually something a good
topic i think
it's a good segue into the topic about
uh networking and job hunting when
it's entirely virtual right that the
traditional avenues of
looking for work are you know are
different now it's gone so the question
is
how can i make my resume stand out
during this time
i'll i'll gladly jump off jump on that
one okay um
so for context right five years ago i
was at blackrock
uh in a in an investment role and i quit
with no plan
and uh we could talk about digital
entrepreneurship uh
and making rash decisions like that if
if our listeners are interested
uh but what what i found was
um i had to build a whole new set of
relationships i was entering a new
industry i was becoming a writer
my world was migrating online and
there's always this
taboo there i would say when i fly into
a new city half of the people i meet
in that new city are friends from
twitter and immediately i get these
strange reactions like
are you what are you doing what do you
how do you even start that conversation
are you that creepy guy that slides
into dms uh and well
fast forward to today like that's the
playing field right that's
that is the only way to network and
there are incredible
incredible stories of people who
are from completely atypical backgrounds
to a specific industry
that just started sharing inform
interesting information on a social
media platform
uh with time caught the eye of a few
kind of thought leaders in that space
eventually they converted those into
full-time jobs so i'm
a big big believer that
fostering genuine relationships on
digitally
through social media can be a phenomenal
networking
um strategy and by the way it's it's the
only one
right now and so that that is something
and again i think a lot of it starts
i think people always say like well i
have nothing to add to the conversation
and i think back to
to this piece of advice that i heard
bill gates say once is like
he said you know everyone always has
something to add to me an 18 year old
has something to add to me to bill gates
and what's that it's perspective bill
gates will never know what it's like to
be an 18 year old and so an 18 year old
telling him
how he sees the world how she thinks
about technology
those are the types of things that are
actually very valuable to your to your
network
and so um think about that as you engage
with um
you know with social media digitally
that's really good to know um i know
okay and it kind of brings to mind what
you were saying
it's sort of like you see you know you
feel free to you know correct me but
it's
you you know you something you said that
stuck with with me it's like no one
really cares what you've done in the
past right it's
if you have something to offer right now
and you know
and you're willing to share it with
people there will be people who will
want to give you
who will want to hear what you have to
say who you know want to give you a
chance right
absolutely and i think i think of uh
there's a gentleman on twitter
uh by the name of jamie cather
catherwood i believe and he was just
like a
history buff a financial history buff
with no financial services experience
and he just started writing these posts
about these like
crashes from 350 years ago that i had
never even heard of and really actually
don't care much about
and but little by little like there's a
lot of financial
history buffs and that like they started
to watch his
his work and people then started just
rooting for him
because he was so passionate about this
thing
and he turned that into a marketing job
at a quant firm and this is someone
completely outside of the
traditional path
that's a nice segue to um another thing
that
uh has come up and i think um it's a so
again nice segue into this and
the role of side hustles um and so
alexis in your piece um and well in your
reporting for the piece you mentioned
that
all the financial planners that you
talked to actually
talked about the importance of uh of a
side hustle can you talk a little bit
more about that
sure they all emphasize the importance
of a reserve fund and however you build
that up
is really really important and
especially to try to build it up
preemptively
ideally before you lose your job is one
way to do that
um so you can do things like if you're
lucky enough to own your own home you
can try to tap
the equity in your home through a home
equity line of credit or a cash out refi
keep in mind those are a lot harder to
come by now and the credit requirements
have been tightened
um but other things you can do back to
the side hustle is to think about what
else you're really good at and at least
again while you're trying to bridge the
gap
until you're getting another job um are
able to find employment next
that being able to fall back on those
side hustles and be able to generate
enough income ideally to put into that
emergency fund is a really smart
maneuver
okay and i'm going to bring it back to k
cause i know you've written so much
about
the side hustle and i think you call it
like diversifying your
identity you know you know tell us a
little bit more about like from your
perspective
yep uh don't do it uh no
i i i i'm gonna speak from both sides of
my mouth because
uh i have made a career a financially
sustainable
you know and we can talk about what i
deem to feel like anti-fragile career
through various modes of digital
entrepreneurship
so i'm a huge huge evangelist of it and
supporter of it
but on from the other side of my mouth
i'm gonna say it took me five years of
writing two to three hours a day
for you know seven days a week five
straight years
so there is like it doesn't just
show up right becoming a digital
entrepreneur
is not that silver bullet that like all
of a sudden
you know yes you know google was started
during the dot com crisis
um and uh facebook was starting during
2008
uh but that so that that is what i'll
say
but the the thing that i love about
digital entrepreneurship
is that it's really like uh it's the
kiddie pool
for a variety of different skills
and diversifying your skill set it's so
so let's take an example
one of the easiest ways to make digital
revenue
is to sell a template online that's that
sounds like so crazy like
who would buy uh you know a fancy
spreadsheet but
people do that all the time for workouts
pre-coronavirus
so you could buy like a 10-tab
spreadsheet
of like different workout plans do you
like crossfit do you like yoga and so on
and for like 10 bucks and again no one's
gonna retire and live in you know new
york city or la
doing uh selling 10 templates but the
minute you create a 10
template then you need to name it
something oh
that's like and put on your branding hat
then you need to like
find distribution put on your audience
development hat put on your social
marketing hat then you need to price it
etc
etc etc and so that little project
that is like this 10 thing that maybe
you know your mom your cousin and
like one high school random friend will
buy uh it doesn't seem like a big deal
but when you realize that you learn
product design branding and audience
development
on your own on your own dime then that's
a really really powerful
uh powerful skill set and then you do
that over a year two years three or six
years ten years
then you become a digital entrepreneur
so okay you you just mentioned a term
which again
segues nicely into sort of the next
topic that i wanted to talk about and i
know that's something you've written
about recently on your blog and it's
it's the building and anti-fragile
career which you know how do you do that
now in in sort of this climate and like
so talk a little bit about it i think we
were sort of getting into that so it
feels like a good segue into that
absolutely uh i think of it as as
two ends of the continuum because it in
one regards you know there are those
companies that are
that are known to kind of lay off the
like every year they lay off the bottom
10
and so if you can invert that if you're
in the top 10
of your peer group you're probably going
to be the last person to
be laid off but that's not something we
can talk about today for tomorrow
but that's something we can talk about
for today for the next five years
right so how do you become a top 10 uh
percent
uh in your uh in your industry but so we
talked about the defensive side like you
know your cash do you know like uh do
you do you have runway uh we talked
about the the more aspirational uh
side like are you in the top 10 percent
of your skills like skill development
but then like in the middle again i
think that there is
you know like diverse like repositioning
uh of skills right i think a lot of so
let's take something like you might have
been
uh you might have been in hr where the
the function might have been quite
traditional
and then all of a sudden like i know it
like
well mental wellness is becoming a huge
part of hr mental wellness in the face
of remote work in the face of a global
pandemic
like sure hr professionals are trained
for that are best positioned to tackle
that but that's
open field right i mean this is just
no one thought that we might be working
remotely till september until
some companies have said january right
there's no playbook for that
that is the opening to kind of raise
your hand
and say you know these are these
questions they're happening in this
space they're happening with my
colleagues they're happening with my
peers
i could see them coming down from hr i
have a personal opinion on
these things how do i triangulate them
and
you know share them with the right
people that's the kind of stuff that's
going to get you noticed
and by the way when there's these giant
tectonic societal shifts
there's giant opportunity especially for
kind of the first movers that kind of
like
rebuild the pieces off of a crisis
so alexis i do want to you know we we've
talked a lot about and like
you know sort of positioning yourself
defensively and
in you know when you are in a position
to
but and again and this is really for
both of you as well but
you know what are some of the steps for
people who don't have the luxury to
prepare that find themselves in this
situation where okay right now
i gotta play defense and i gotta figure
it out today you know
is there anything that would be
different in terms of what you've laid
out in your column
sure the one thing that i should have
added before is while you are still
employed
on the health insurance fund you should
really be taking advantage of that
health insurance
so you know get appointments and while
you can obviously most doctors offices
aren't open or they're
not doing stuff that isn't essential but
once they start opening or take
advantage of telemedicine
that's really really important fill
those prescriptions do all that
sort of stuff before you're no longer
employed then once you've been laid off
and you don't you aren't able to take
advantage of those resources obviously
figure out on health insurance front
whether you're going to purchase
insurance through the exchanges
or you're entitled to cobra you know
figure out what those um
payment people would be because you can
be pretty financial especially if you
have dependents
um and then unemployment benefits um you
know part of the care is act there's an
extra 600
stipend so that's something that people
should be aware of too make sure you're
getting exactly you know what you're
eligible for
um those would be the main things um the
other thing i wanted to raise too 529
payments
that's the kind of thing i hear again
and again that again
unless you have your child is like 16 or
17 is just a year or two away from
college
but that seems to be in the hierarchy of
payments that you're making you know
41ks or other accounts seems like the
529
it's totally fine to pause those
payments because especially if you've
been laid off already you have more
essential things
you know that you want to think about
like your mortgage or
food and obviously very basic things so
don't feel too bad about pausing that
temporarily
and the you know the penalties for doing
so you can easily catch up so it's not
too bad
okay anything to add from a you know so
from sort of a job hunting
reassessment type yeah i would add um
i would add two two things the first is
like
who's your squad right i always ask
people if if you're down if you're
you're down financially health wise
who is who's going to go to bat for you
right
and i think if you think of the long
game of anti-fragility you've been
you know you're not going to call
someone you haven't spoken to in 10
years and say like hey i need a favor
right now
but like write it i i believe in like a
very systematic way of writing this down
step by step like
these are the five 10 15 people that can
help me
uh you know if i feel like i'm in a
precarious situation start planting the
seed obviously confidentially
so on ask them who they should who you
should talk to what opportunities
they're seeing
uh you know get ahead of it through
relationship building genuine genuine
relationship building
the second is that from an economic
perspective this
this crisis is creating a lot of
companies that are doing
really well in the companies industries
that are doing really well in industries
that are
doing really poorly so one one very
simple thing
uh would be to look at all the companies
that have raised venture funding uh
during the pandemic they're playing from
a sign of strength you know i could
think of two
you know notion and uh stripe raised
large
large rounds late stage rounds with
every 50 million dollar round there's
50 new jobs across marketing comms
finance
you know just because it's a tech
company late stage tech companies
hire you know everything from office
managers to paralegals
to front-end engineers so look for the
pockets of strength uh and now by the
way everything
is remote or a lot more is remote that
you know that company that you didn't
want to work for
in chicago might actually be open to um
to to you working remotely
um we're getting a couple more questions
here so alexis this one
is for you um the question coming from
the audience is if i get laid off do i
need to consult a lawyer
um i would say it depends what your role
is and how kind of complicated your
exit package is going to be um so i
think currently if you're an
executive type role and there are lots
of moving parts
as part of your exit package then yes
because i think it's very true that kind
of the first moments after you're
terminated or you get the call
that's when things are most fluid and
most negotiable so i think it would be
very helpful if you've been speaking to
an employment lawyer
to kind of just again get a sense of
what you're entitled to what you are in
so you can try to negotiate those things
um initially you know right
before you even walk out the door and
things have been more set in stone
um so that i think would be the general
rule of thumb if again
you don't have that complicated package
or they're pretty straightforward
then it's probably not necessary you
know pay legal fees
all right very good advice and so uh we
have time for just one more question so
i'm gonna pose it to both of you we'll
start with kay and so the question we're
getting from the audience is
share your best tip for a virtual job
interview
ooh that's a good one good lighting and
good sound
um that's not my answer um
i would say you know when you
communicate
via zoom or digitally a lot of the
nuance
of like body language gets lost so
just it's it's be yourself more
um like ask more questions like you have
to overcompensate for the lack
of subtle um body leak cues with
language and i think that that's okay
just be
be genuine be more curious like ask a
little bit more like how's your day you
know
uh how's your day going how are you
doing today things like that and then i
would also flip it
uh and i think this is not just for
virtual handwritten thank you notes
think about you get uh 100 emails a day
a thousand
things in your stream how many times
does someone send you
a hand addressed letter to you
especially in a time when we're all home
that thing jumps to the top of the queue
no matter what so
uh stand a handwritten note even when
you're not in a quarantine
that's really good advice um alexis
anything to add here on one final note
i'd say keep your children entertained
with an ipad
which we're all doing
guys um you know we just run out of time
but this has been a great conversation
thank you both so much for joining us um
so i want to thank
alexis leondis uh bloomberg opinion
columnist for joining us
and also kay he from who's joining us
from los angeles he's the
creator of rad reads um again thank you
so much for such
a informative uh conversation especially
in a time like this
uh so i just want to remind everyone who
is watching that
you can follow our ongoing coverage of
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thank you so much thanks thank you
