At the beginning of 2023, several major companies including Google, Meta, and Goldman Sachs performed major layoffs due to slowing sales and a general economic slowdown. Now, other companies like CVS, Grubhub, GAP, and more are announcing cuts to their corporate office staff.
Whether you just received your notice, have seen threatening news headlines, or have heard rumors circling the office, you might be wondering what to do after being laid off. It can be scary to think about and most of us might want to push the uncomfortable thoughts away, but your financial goals and progress are too important to not be prepared for the worst.
Just like we carry auto, health, and life insurance to protect us from unfortunate situations, we should also be equipped with strategies and tips for other unexpected situations, such as layoffs.
5 Financial Tips to Get Back in the Game after a Layoff
Effective money management is crucial during both prosperous and lean times, that’s why we love empowering you with simple yet efficient strategies to help you navigate your financial life. If you’ve been laid off recently, implement these five strategies:
Find a temporary source of income
Reassess your budget
Sort out your insurance
Dust off your resume
Remember your self-care
We hope these financial tips will serve as a roadmap during this disruptive and emotionally-draining time.
1. Find a temporary source of income
As soon as you receive your layoff notice, talk to your Human Resources department to discuss final paychecks, severance pay, or if they’ll pay you for unused vacation and sick time—every company is different. Check on your emergency fund and make sure you can easily access it.
If you were laid off through no fault of your own, you are most likely eligible for unemployment benefits through your state. Applications and subsequent benefits checks can take several weeks, so it’s important to apply for unemployment as soon as possible.
Unemployment benefits can help you pay for essentials while you find another full-time role. These benefits are taxable, so you’ll want to either choose for taxes to be deducted or set aside the cash for April. Each state has its own guidelines for the amount of benefits, qualifications, and length of time you can receive benefits.
Some states might allow you to work a part-time job while receiving partial unemployment benefits. Picking up a side hustle such as working as a barista or delivery driver can help you supplement your benefits and help you get out of the house.
2. Reassess your budget
Once you’ve secured a temporary income source, it’s time to look at your budget. Carefully go through each category and see where you can cut expenses, such as:
Dining out
Subscription services
House cleaning or yard maintenance
Luxury items (jewelry, designer clothes, etc.)
Entertainment
You’ll likely have some extra time on your hands during this season, you can use it to perform tasks you may typically outsource such as grocery shopping, cleaning, and washing your car. You can even assess certain insurance needs (such as auto insurance) to see if you can temporarily reduce coverage if you’ll be driving less.
Remember, you can always add categories back to your budget once you’re gainfully employed again, but to stretch your emergency fund and temporary income, it’s best to focus solely on essentials such as housing, utilities, food, and insurance.
Try not to touch your retirement savings or other sinking funds unless you truly need them to keep you afloat. You’ve worked hard building your investments and don’t want a temporary setback to hinder your wealth-building efforts.
Talk to your financial institutions and utility companies and explain your unemployment situation. Some companies can offer delayed payments or discounted prices during times of hardship. It’s better to reach out ahead of time than to be stuck with late fees or penalties.
3. Sort out your insurance
If you were on an employer-sponsed health insurance plan, you may find yourself now stuck without any coverage. It’s important to figure this out as soon as possible because you don’t want a medical emergency to set your financial progress back.
Thankfully, you have a couple of health insurance options after a layoff, you can:
Find a Marketplace insurance plan. The cost of these plans depends heavily on your household size and income. You can see what you qualify for here.
Sign up for Consolidated Omnibus Budget Reconciliation Act (COBRA). This continuation of health coverage allows you and your family to continue your employer’s group health insurance plan for some time after a layoff. You will be responsible for paying the entire premium (which might be a shock to your budget if your employer was paying partial or full converge for you).
Join your partner’s health insurance plan. If your partner has coverage through their employer, look into whether you qualify to get added to their coverage.
4. Dust off your resume
Once you’ve secured income for your essential expenses, created a bare-bones budget, and sorted out your health insurance, it’s time to dust off your resume! Your resume is often your first impression for new employers and often is what either lands you an interview or not.
Set aside some time each day to engage in effective job search strategies such as spending time on LinkedIn, networking, learning new skills, reading company websites to learn their culture, and customizing your cover letter and resume.
This process can quickly get overwhelming and discouraging, so it’s important to set mini goals for yourself, such as:
Apply for two jobs every day.
Spend 20 minutes on LinkedIn making new connections and engaging in content.
Learn one new skill per week.
You might want to consider pivoting career fields if your previous field was volatile or even unenjoyable. Now is a great time to assess what you want your future career to look like and to chase after your dreams.
5. Remember your self-care
Getting laid off is a very stressful life experience. Take some time to grieve and feel all your emotions. You may even consider confiding in a friend or journaling. Once you’ve mourned your job loss, try to focus on the bright future ahead of you and take care of yourself.
During this season, try a few budget-friendly ways to enjoy yourself. Pick up a few page-turning novels from the library, watch the sunset with a friend, go on a walk at a gorgeous park, learn a new nourishing recipe, meditate by a body of water, or invite a friend over for homemade lattes.
Your self-care doesn’t have to be expensive, the goal is to take care of yourself physically, mentally, and emotionally. Be honest with your friends and explain that while you’re laid off you can’t go out but that you’d be happy to spend time with them frugally. They’ll see that you’re dedicated to both your financial goals and your friendships.
Start Living a Life of Freedom with Wealthly
Here at Wealthly, we understand that your financial progress is not always linear. There will be times of volatility and hardship and also times of prosperity and growth. As a personal finance coach, I help you improve your money mindset, plan for the future, and revel in financial freedom.
To see if we can help you conquer your finances, even if through challenging times such as layoffs, email me at latoya@wealthlyliving.com or click here to fill out a contact form today. We’ll be in touch soon!
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.
Comentarios