The hard truth is that the loss of your job means a loss of income—a fact few people can afford to ignore. You need to address this issue immediately and try to keep your lifestyle as stable as possible while looking for your next job. Here are some strategies to cope with the loss of income:

Look closely at your severance benefits.
Many companies provide liberal severance benefits and it’s important that you know what you’re entitled to. Your employer may provide severance pay and you may or may not have to sign a legal release in order to receive it. In addition, you may be entitled to receive pay for unused vacation and sick days, and some employers continue medical insurance for a limited period at low cost to the individual. The federal government mandates, under a law known as the Consolidated Omnibus Budget Reconciliation Act (COBRA), that health benefits be extended to former employees at cost, plus a small administrative fee, for a period of 18 months or until you find another job. This rate may be lower than obtaining private insurance. If you fail to pay the premiums, your coverage under COBRA will be canceled and you will not be able to reestablish it.

Make sure you fully understand the terms of your separation and what conditions you have to meet in order to receive your severance benefits, particularly before you sign anything. In addition to a legal release, you may have to remain in your job until a certain date, etc. Once the shock wears off, weigh all of your options and make your decisions with a cool head.

Know the specifics of your retirement plan.
Don’t jeopardize the status of your hard-earned contributions. If you have an annuity or participate in a retirement savings plan such as a 401(k) or 403(b), be sure you’re familiar with any separation from service terms contained in the plan. If you’re eligible for a lump sum payment of your accumulated retirement benefits and you’re under age 59 1/2, you may be subject to a penalty plus the payment of regular taxes. To avoid the penalty and continue the tax-free status of your investment, you must roll over or transfer the funds into your own Individual Retirement Account (IRA) or into a new employer’s retirement program. Check with your benefits advisor, tax consultant or financial advisor for the specifics.

File for unemployment.
Unemployment compensation is an insurance policy designed to help people who have lost their jobs. Do not be ashamed to file for your benefits. The government requires your employer to pay into this fund for just such an occurrence. However, generally you cannot collect unemployment if you are terminated for cause or if you resign. Be sure you consider that if you are asked to officially resign as a condition of a severance package.

You’ll find more information and the address of your local unemployment office on the Department of Labor’s website. You usually have to apply for benefits in person. Be sure to bring the following items with you:

• Your last paycheck stub
• The final date you worked
• The reason for termination
• Your Social Security card
• Another form of identification (driver’s license, passport)

It’s a good idea to write down the name of the person who processes your paperwork, just in case you have any problems. Be prepared to wait as long as three weeks for unemployment benefits to start.

Cut your expenditures.
Start by creating a budget. Make a list of your savings and income. Then, make a second list of your monthly expenses. Compare the two to see how long your savings can carry you and plan accordingly. You’ll want to cut expenses to make your savings last longer in case you can’t find a job immediately. But don’t eliminate all the perks and rewards from your life during this stressful period - just be cautious. Try renting a video instead of going to the movies and buying generic brands at the grocery store.  Receive more helpful budgeting tips with Life Advice: Creating a Budget.