How To Navigate Job Loss And Care For Your Mental Health While Unemployed

Medically reviewed by Melissa Guarnaccia, LCSW
Updated February 4th, 2026 by BetterHelp Editorial Team
Content warning: Please be advised, the below article might mention substance use-related topics that could be triggering to the reader. If you or someone you love is struggling with substance use, contact SAMHSA’s National Helpline at 1-800-662-HELP (4357). Support is available 24/7. Please see our Get Help Now page for more immediate resources.

Job loss is very common, with one survey suggesting that approximately 40% of people have lost a job at some point in life. Despite being a widespread phenomenon, job loss can have a significant impact on a person, not only financially, but emotionally as well. When a person loses their job, they often experience a major transition period, with shifting family roles and the potential for significant mental health challenges. Keep reading to learn more about the potential effects of job loss as well as strategies for managing stress and implementing self-care techniques during a period of unemployment. 

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Experiencing mental health effects of unemployment?

The mental health effects of job loss, even with unemployment insurance

While many people know that job loss can lead to economic instability, the emotional impacts of losing a job are typically less well known. Even if people receive unemployment benefits, they can experience a variety of emotional challenges.

Some people may feel a drop in their self-esteem, as work can sometimes provide a sense of fulfillment beyond a source of income. Also, job loss can often lead to a sense of rejection. Even if a person knows that a job loss is solely due to a recession or cutbacks in a specific industry, they may still experience it as a form of personal rejection. 

Many providers on BetterHelp now accept major insurance carriers. In many states, certain therapists on BetterHelp may be in-network with certain insurance plans. Coverage depends on your plan, provider, and availability. 

When sessions are covered, members typically pay an average copay of about $19 per session. Check your in-network status on the BetterHelp site. Coverage varies by state and provider availability.

Shifts in identity when not part of the labor force

For some people, job loss can sometimes lead to a shift in various life roles. For example, a person may have been the main breadwinner in their home while working, so they may have to take on a new role in the household while unemployed. Even if a person has the full moral support of their family, new roles can be difficult to adjust to, as people may sometimes see financial contributions as a core part of their identity. 

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Common mental health challenges when looking for employment

Some people may find themselves in a much longer job search than they expected. Even if they’re attending interviews that seem to go well, they may go months or even years without a job offer. Well-meaning friends may ask them how their job search is going, but these questions can add pressure on an unemployed person. 

A long, protracted job search can sometimes make a person wonder if they’ll ever work again in the same job or in the same field. Some people may experience anxiety or depression as a result, which may be diagnosed by a therapist if the symptoms qualify. 

In some cases, individuals may also experience challenges with substance use during a job search. These may develop if a person starts using substances in an attempt to cope with stress and anxiety related to job loss. 

Self-care strategies to consider while unemployed

While a period of unemployment can have a profound impact on a person’s mental and physical health, there are a number of evidence-based self-care strategies that may help a person protect their well-being during this challenging time. The following are just a few examples:

  • Practice breathing exercises. While you may think of breathing exercises as something people do in the height of a particularly stressful moment, regular practice may help reduce the physical and mental effects of stress daily. 
  • Get regular physical exercise. Research suggests that exercise can lead to the release of endorphins, which are often referred to as the body’s “feel-good” hormones. Moving your body may help boost your mood and reduce your risk of physical health problems over time.
  • Spend time with loved ones. Although a job search can take up much of a person’s time, people who are unemployed can often benefit from scheduling regular time with friends and family members. The simple presence of loved ones can boost mood and help a person feel supported.
  • Practice meditation. Meditation doesn’t have to involve long sessions or retreats. Even short, five-minute meditation sessions may help lower stress levels and increase mindfulness.

Mental health support after losing a job

In addition to implementing self-care strategies, people who are experiencing unemployment may benefit from speaking with a mental health professional. A licensed therapist can help clients identify and challenge negative thought patterns that may arise during a period of unemployment. This process may lead to greater confidence and more productive job interviews and reduce the risk of certain mental health challenges like anxiety or depression. If you’re already experiencing mental health challenges, a therapist can offer treatment to address your symptoms.

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Experiencing mental health effects of unemployment?

Seeking online mental health support while unemployed

Some people who are going through a period without employment may be concerned about the cost of therapy. One more cost-effective option is to seek support through online therapy, which tends to be more affordable than in-person therapy. Also, online therapy allows individuals to connect with a therapist from home at times that suit their schedule. 

In addition to offering affordability and flexibility, online therapy has a strong basis of support in the psychological literature. For example, one systematic review and meta-analysis suggests that, in some cases, online cognitive behavioral therapy (CBT) can actually be more effective than in-person therapy for treating symptoms of depression, which can be common when people are unemployed. 

Takeaway

Job loss can have a significant impact on a person’s mental health and well-being. Some people experience a period of confusion and a change in household roles during a period of unemployment, which can affect their self-esteem and family dynamics. Also, depression, anxiety, and substance misuse challenges are not uncommon. During such a period, individuals may work to protect their mental health by implementing self-care strategies and speaking with a licensed therapist, whether in person or online.
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