How To Deal With the Stress of Losing Your Job

Jennifer Herrity

Updated 27 October 2022

Published 29 August 2020

Jennifer Herrity is a seasoned career services professional with 12 plus years of experience in career coaching, recruiting and leadership roles with the purpose of helping others to find their best-fit jobs. She helps people navigate the job search process through one-on-one career coaching, webinars, workshops, articles and career advice videos on Indeed's YouTube channel.

Losing a job is one of the top five most stressful events in a person's life, and as of July, 1.009 million people are experiencing such loss due to COVID-19. In addition, people are dealing with avoiding sickness, losing or caring for loved ones, teaching kids who are home from school and other potential stressors. In this article, we sat down with psychologist Nancy Lin to understand how job-related stress can affect you, including tips on how to deal with the stress of losing your job and simple actions you can take today.

Related: How to Deal with Job Loss

What is stress?

According to Nancy L. Sin, PhD, Assistant Professor in the Department of Psychology at the University of British Columbia, psychologists often define stress as 'an imbalance in which your perceptions of loss, threat or challenge (such as losing your job) outweigh your perceived ability to cope with the situation'.

When experiencing stress, your body undergoes a series of responses to address the threat by releasing stress hormones and engaging a fight or flight response. While this natural response can be life-saving in dangerous situations, Dr. Sin says, 'This response is less helpful for preparing us to handle the types of stressful situations we face in the modern world. The repeated activation of these physiological stress systems can accumulate over time to cause wear-and-tear on our bodies. As a result, people who are under long-term stress (such as unemployment) are at greater risk for the development of chronic health conditions ... compared to those who are not under long-term stress'.

Ways to deal with stress after a job loss

While feeling stress or anxiety due to job loss is your body's way of taking care of you, its effects on your ability to job search may be counterproductive. You may be feeling stress due to the lack of control involved in both job loss and finding a new job. As such, it can be helpful to take back some control with small, simple actions.

Here are several steps you can take to combat the effects of long-term stress:

  1. Allow yourself time to grieve

  2. Assess your financial situation

  3. Set small career-related goals

  4. Take time for personal reflection

  5. Maintain or adopt a healthy routine

1. Allow yourself time to grieve

Allow yourself time to grieve with a goal to move towards acceptance quickly. The five stages of grief – denial, anger, bargaining, depression and acceptance – are a part of the framework that helps us learn to live with loss. The stress of losing a job can be attributed to things like losing financial security or the loss of your connection to a great team.

Lingering in the first stages for too long can limit your ability to create an action plan and may impact your perception of your future employability. If you were laid off due to the impact of COVID-19 through no fault of your own, remember that you have unique skills, knowledge and qualities to offer your next employer.

Read more: How to Deal With Job Loss

2. Assess your financial situation

One of the major stressors that stem from the loss of a job is the impact on financial stability. Understanding where your money is going as well as when and how much you’re spending can help relieve some of the stress surrounding your finances. Once you know how much it costs to cover your expenses, you can reassess your accounts and financial security, adjusting as needed.

Create a budget worksheet

Keeping a budget allows you to take control of your finances and, as a result, ease your mind. You can design a budget worksheet by creating three sections: your income, your expenses and your bottom line.

Your income: Your income includes any take-home pay you receive, including wages, tips and bonuses. Financial assistance including unemployment benefits can be included, though you should take note of how long you will be receiving these benefits.

Your expenses: Your expenses include line items such as housing (rent or mortgage plus taxes and insurance), transportation (car payments, petrol, insurance, scheduled maintenance fees), utilities (gas, electricity, internet), groceries, medical (private health insurance, prescriptions), debt payments (credit cards, student loans) and a custom field for any expenses not covered. These can include hobbies and personal care expenses.

Your bottom line: Your bottom line is your income minus your expenses.

If necessary, apply for unemployment or other benefits

If you qualify for unemployment benefits, apply as soon as possible. This can help alleviate some of the stress you may be having around your financial situation, and give you more time to focus on your job search.

Read more: Guide to Unemployment Benefits

3. Set small career-related goals

Much of the stress associated with job loss can stem from the feeling of lack of control in decisions affecting your career. Here are some steps you can take to regain control:

  • Conduct a needs vs. wants assessment

  • Set an attainable goal

  • Reach out to your network or make new connections

  • Take a class to up-skill

Conduct a needs vs. wants assessment

The career planning process begins with self-reflection and identifying what is most valuable to you in a job. An initial exercise for identifying what you require in a job vs. what you would prefer is completing a needs vs. wants assessment. Doing so can help you to define your minimum job requirements versus perks, benefits or other qualities that are nice to have.

Once identified, you can compare potential job opportunities to your sheet to find a job that best fits your individual needs and wants. The components of a needs vs. wants assessment include your salary requirements, job responsibilities, healthcare, work–life balance, professional development and company culture.

Most of us must balance looking for jobs that meet our requirements with finding opportunities within the right time frame to support ourselves and our families. If you must take a job out of necessity, you can still include this experience to build out a strong resume in the future by limiting the description of the role to your responsibilities and accomplishments that align with your ideal job.

Related: How to Find the Best Jobs for You

Set an attainable goal

Start applying for new opportunities once you’ve established what you need and want for your next role. Setting and reaching achievable application goals creates a structure that allows you to monitor your success, which may help alleviate stress through your achievements. For example, you might start by setting a goal of applying for three to five opportunities that you are qualified for per day.

Stay organised by creating your own job application tracker that includes the link to the posting, company name, role title, salary/hourly rate, application date and recruiter information if available. Organising this information makes following up on the status of your application easier.

Reach out to your network or make new connections

Taking the time to connect with others – past colleagues, managers, classmates, professors, mentors, volunteer leaders or peers, members of university or current clubs or professional organisations, etc. – can both offer context around how they are handling the current circumstances and help you learn about opportunities available through your network.
Start by checking in with current relationships regularly first, then expand to new connections who are serving in your desired role or managers who assist in hiring decisions.

While now may not be a good time to meet in person, you might consider asking relevant connections to meet up virtually or by phone. For example, you might consider conducting an informational interview via video chat to learn more about someone’s day-to-day tasks in a role you’re interested in.

Take a class to up-skill

Once you’ve self-reflected and identified the type of work you want to pursue, you might use this time to gain or up-level relevant skills. Start by researching skills required for roles you’re interested in applying for.

To begin, find a job posting for a role that interests you. Then, look at the required and preferred skills section. You can check your local TAFE or university to see if they offer free or discounted online courses for the skills you’re looking to develop. Be sure to add your newly gained skills to a 'Certifications' section in your resume.

4. Take time for personal reflection

Time for personal reflection is a benefit that comes with a break in employment. Here are some simple tips to help you set time for yourself without losing productivity.

  • Set 'working' hours

  • Reset with family and friends

  • Practise controlled breathing exercises

Set 'working' hours

A common occurrence after a job loss is developing a habit of constantly applying to jobs to maintain a feeling of productivity. While a high level of activity can give you the sense that you’re being active, it can quickly lead to job search burnout. Take regular time off from the job search to combat this form of stress. Use the time to reset and have a fresh start the next day.

After a job loss, it can be helpful to think of your job search as your new full-time responsibility. Set designated work hours for job searching and building your skills with breaks in between to relax and reset.

Reset with family and friends

Connecting with your support system is critical during a time of uncertainty. When experiencing grief, it’s possible to develop feelings of isolation that can heighten your level of stress. Have regular conversations with your support system to check-in, ask for help if needed and simply enjoy your time together.

Related: 9 Virtual Social Activities To Stay Connected

Practise controlled breathing exercises

Controlled breathing is the practice of getting as much air as possible into your lungs at a controlled pace. This technique is proven to be a powerful tool when trying to alleviate stress. In a 2018 study conducted by Trinity College Institute of Neuroscience and the Global Brain Institute at Trinity, it was shown that there is a neurological link between deep breathing practices and positive cognitive benefits including more positive emotions and decreased emotional reactivity. If you are feeling stress, a quick exercise like this 1-minute deep breathing exercise courtesy of Headspace, can help you regain focus.

5. Maintain or adopt a healthy routine

Dr. Sin also reported that stress affects our health behaviours by causing us to 'be less physically active, eat a less nutritious diet and be less likely to maintain good sleep habits'. Understanding those tendencies and developing small but meaningful practices to stay healthy can help counteract them. According to Dr. Sin, 'One of the best ways to counteract stress (and to reduce the negative impacts of stress on your health) is to practice good health behaviours. In fact, there is evidence suggesting that when you engage in physical activity, you are less likely to show a heightened emotional response to stressful events on the same day'.

Here are some tips for maintaining or adopting a healthy routine:

Practice static stretching

Static stretching is a good first step to establishing an exercise routine. Static stretches extend a muscle to a range of motion that is both comfortable and challenging. Hold that position for 10–30 seconds while focusing on your breathing. This stretch allows you to settle your mind, increase oxygen flow and prepare your body for physical activity.

Get some sleep

Sleep disruption commonly occurs after a job loss because of the interference with your normal daily schedule. Seven to nine hours of sleep is recommended for adults and has been proven to be a powerful stress reducer. Using a controlled breathing technique before bed is a good way to set yourself up for a restful night of sleep. Other tips include limiting distractions such as TV, mobile phones and tablets, exercising during the day and establishing a bedtime routine. If you find that you still struggle to get quality sleep, it might be helpful to speak with a healthcare professional.

Establish a daily routine

Establishing and maintaining a healthy daily routine can help you regain the feeling of control after losing a job. As stated in Charles Duhigg’s book, The Power of Habit, even the small act of making your bed in the morning is correlated with increased productivity, a greater sense of well-being and increased success with sticking to a budget. A daily routine can contain time for job search, household chores, self-reflection and time spent with family or friends.

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