5 Things Not To Do in the First 30 Days After Losing Your Job
There are few things more terrifying than losing your job. After hearing the dreaded words, the ground can feel unsteady beneath your feet, and your head may swirl with questions — mostly about how you’ll stay afloat financially, support your family and find your next gig. In the immediate aftermath — especially in the first 30 days — you’re more prone to making rash decisions.
Knowing what not to do after a job loss can help protect your finances and your future. To help you avoid moves that could set you back before you take your first steps forward, MoneyLion consulted experts. They offered clear advice on what to avoid in those critical first 30 days.
1. Don’t Dip Into Your Retirement Accounts
When you’re panicked about where your next paycheck will come from, you might be tempted to pull money from anywhere you can — including your retirement savings. According to Jeffrey Hensel, a broker associate at North Coast Financial, that’s one of the last things you should consider. He calls it a “disaster,” noting you could lose 10% to an early withdrawal penalty, plus ordinary income taxes on the amount withdrawn.
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“Based on my years in the field, cashing in that money kills your growth in the long run and leaves you with a huge tax bill down the road,” he said.
Beyond penalties and taxes, withdrawing retirement funds can permanently reduce the compounding growth that those dollars would have generated over decades.
2. Don’t Keep Spending As Usual
If you developed less-than-stellar spending habits when your income was steady, you know how quickly your checking account can drain. Now imagine it shrinking without new deposits to replenish it.
Hensel has seen it happen all too often. People who weather unemployment more successfully adjust their budgets immediately; those who struggle tend to continue as before.
“In the work I’ve done, the biggest change I’ve observed is that survivors cut all the nonessential costs the very first morning,” he said. “You have to get the bleeding stopped before you can even think of finding a new role.”
He describes cutting spending as a key step while you file for unemployment benefits and protect your remaining liquid cash. That may mean pausing subscriptions, delaying large purchases and prioritizing essentials like housing, utilities and food.
3. Don’t Sign Any Agreements Too Quickly
When Punit Jindal, founder of Dancing Numbers, works with clients worried about job loss, he gives them one key piece of advice: Don’t sign anything without reviewing it carefully.
“That sounds obvious, but employees have been handed paperwork the same hour they are let go, with HR waiting in the room,” he said. “By signing, you waive your right to negotiate.”
Taking even 48 hours to review documents can help you spot clauses worth pushing back on, such as noncompete agreements, nondisparagement clauses or other limits on your ability to work in your industry. You may also want to consult an employment attorney, particularly if severance pay or equity is involved.
4. Don’t Forget About Helpful Resources
In their haste to move on — or out of sheer anxiety — many people overlook resources available to them, sometimes as part of their severance packages. Jindal has seen it too many times. People either don’t look for these resources or fail to negotiate for them.
“Many severance packages include career coaching, resume help and recruiter access, and people never use them because nobody mentions it clearly,” he said. “Accrued PTO payout is another one that gets left behind when someone does not ask. Stock vesting schedules sometimes provide a 90-day post-termination exercise window that employees miss because they have not read the equity plan documents.”
In those first 30 days, take time to inventory what you’re owed — from unused paid time off to health benefits, equity options and outplacement services. Missing these details can cost you thousands of dollars.
5. Don’t Delay Signing Up for COBRA
Jindal has also seen people get a rude awakening when it comes to COBRA benefits. They wait until they need a doctor before signing up — only to discover they’ve miscalculated their timing or underestimated the cost.
“COBRA is retroactive, so some people believe they will only elect it if something comes up,” he said. “The issue is you get 60 days to make your decision, and if you don’t elect it, you lose coverage in that plan period forever. Retroactive sounds safe until you realize you have to pay all back premiums at once before the insurer covers anything.”
Because COBRA keeps your exact plan and network, it’s important to act quickly if you have ongoing prescriptions or specialist appointments. That said, Jindal notes that marketplace plans — particularly those with income-based subsidies — may be less expensive while offering similar coverage. Compare total premiums, deductibles and provider networks before deciding, but don’t drag your feet during that 60-day window.
The Bottom Line
A job loss can be devastating, but it’s not the end of your story. In time, you can rebound. Making the right moves — and avoiding the wrong ones — can help you stabilize your finances and regain momentum. Be especially mindful of acting rashly or missing important deadlines in those first 30 days.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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