Personal Finance

'Roseanne' cancellation a reminder of what to do if you're suddenly out of work

Key Points
  • ABC's sudden cancellation of the "Roseanne" show, which generally means those working on the sitcom are now unemployed, is a good reminder that job loss can happen without warning.
  • Those who find themselves in a similar situation should focus on minimizing expenses and maximizing savings, along with seeing if they qualify for unemployment insurance.
Roseanne Barr
Vera Anderson | WireImage | Getty Images

With ABC's cancellation of the hit sitcom "Roseanne" on Tuesday, people who worked on the show suddenly found themselves out of work.

The situation is a good reminder that events out of your control can leave you jobless.

While national unemployment is currently low and new work might be less challenging to find than several years ago, the realization that you unexpectedly have no income can be jarring. Nevertheless, it also should be a time of action.

"If you weren't already organized with your finances, being suddenly unemployed is really the time to get organized," said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York. "It's reactive, but important.

"The emphasis is going to be on finding new employment and you don't want to be distracted."

Here are some tips for those who find themselves unexpectedly without a job.

Look into unemployment insurance

First up is seeing if you are eligible to collect unemployment benefits. While the specifics of each state's program differs, workers who qualify for a weekly unemployment check can generally get help for up to 26 weeks.

This can be trickier for gig workers or contractors, due to various requirements imposed by your state. However, it's worth looking into it instead of assuming those weekly checks are unavailable to you.

For information on how to apply, start with your state's labor department.

Evaluate financial resources

Sudden unemployment is one of those situations that shows why many financial advisors recommend setting aside at least six months' worth of living expenses for emergencies.

Regardless of whether you have that much, or a smaller amount, saved, you should trim your budget as much as possible to stretch out whatever savings you have.

"This is a time to really analyze what expenses are absolutely necessary and then pull back on your discretionary expenses," Boneparth said.

Weigh health insurance options

If you were receiving health insurance through your employer, there's a good chance you can keep it. A law known as COBRA allows qualifying workers to keep their group coverage when they leave the job, assuming the employer is subject to the law (smaller firms and certain other employers are exempt).

However, you'll be responsible for paying the full premium. Under COBRA, you generally can keep the group coverage for up to 18 months.

This is a time to really analyze what expenses are absolutely necessary and then pull back on your discretionary expenses.
Douglas Boneparth
President of Bone Fide Wealth in New York

Alternatively, you can look for a health plan on the open marketplace that could be cheaper.

If you want to keep your group policy, contact your company's human resources department for guidance.

Stay on top of debt

Even when you face a drop in income, you're still expected to continue paying your bills, including your debt. If you anticipate trouble staying on top of those payments, contact your creditors to see if there are options for reducing your monthly payments.

Debt, whether in the form of credit cards or student loans, can spiral out of control if you don't stay on top of it.

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Leave retirement savings alone

If you have a 401(k) plan or individual retirement account and you're under age 59½, taking money out could result in an early-withdrawal penalty of 10 percent. That's on top of paying ordinary income taxes on any money withdrawn.

While many 401(k) plans allow workers to take a loan from their account, that option generally disappears when you leave the company.

Focus on job huting

The goal in between all of this is to find new employment. Keep in mind that expenses incurred from job hunting are no longer tax-deductible, effective this year.

Make sure that in addition to scouring job listings, you reach out to your professional network to let them know you're in the market for work.

"This is when your network is going to be extremely valuable," Boneparth said. "You could find your next job through it."