Changing Jobs

Transitioning to a new job isn't always smooth — or immediate. The gap in income between one job ending and the next beginning is one of the most important reasons to have an emergency savings fund. The fund should cover at least three and ideally six months of your living expenses. Having it to dip into can be the difference between falling into debt and barely getting by until your situation improves.

If you're participating in a retirement savings plan, you'll need to decide what to do with the money when you leave. You own the value from your contributions and their earnings; a schedule called vesting determines when you also own your employer's contributions. Often you can leave the assets in your former employer's plan, transfer (or roll over) them to your new employer's plan, or roll them into an Individual Retirement Account (IRA).

One of the most worrisome parts of losing a job is the simultaneous loss of medical insurance. There are options to stay covered — in most cases you'll pay the full cost, since your employer no longer covers part of the premium. But paying for coverage is almost always better for your long-term financial wellness than risking high medical bills without it.

COBRA can require your insurer to offer you the same coverage for up to 18 months (29 if you're disabled). It's expensive — you pay the full cost plus up to 2% in fees — but it may be cheaper than buying on your own. You can also buy directly from an insurer, or find a plan through the Affordable Care Act at Healthcare.gov or a state marketplace, which can often provide discounts based on your situation.