A 2019 study from Intoo reported that 40% of Americans have been laid off from a job at least once in their life. While getting laid off from your job might be more common than you think, it can certainly be a very stressful time.
Losing a source of income can greatly impact your day-to-day operations especially if you don’t have other sources of income to rely on in a pinch. Beyond the financial impacts, you may also feel ashamed and embarrassed if your job or career is a big part of your identity. You may also feel angry or other negative feelings towards the company that laid you off.
Whatever circumstance you’re in and whatever feelings you feel after a layoff, it’s important to remind yourself that your job does not define your worth as a person. Even more, there are things in your control that you can do to navigate your finances during this time.
Here are some tips for managing your finances after being laid off:
Be easy on yourself.
Take the time you need to process the news. You don’t have to share the news with anyone immediately, unless you feel the need to. You might feel a lot of emotions so you need to give yourself grace. Take care of yourself and your health, first and foremost, before tackling the financial impact of being laid off.
Assess your finances.
Take a look at your finances to understand what you’re working with. Do you have an emergency savings fund? Do you have money that’s easily accessible such as what you hold in checking and savings accounts? What debt obligations do you have? Now is a great time to put together a budget or review an existing budget to identify your “needs” vs. your “wants.”
Ask your employer questions.
It’s usually your manager or a human resources representative who will communicate that you’ve been laid off. They may or may not proactively provide you a “packet” of information regarding your layoff. Make an effort to understand this information because it will likely impact your financial future. Rather than asking, “Why me?” or “Who else is being laid off?”, here are some (but not all) common financial-related questions you might consider asking:
- When will my last day be?
- When will I receive my last paycheck & how will I receive it?
- Will my unused vacation time be paid out? When?
- Am I going to receive severance pay?
- What will happen to my bonus and/or commission?
- How long will I have healthcare coverage?
- When will I be eligible for COBRA?
- How long do I have to exercise my stock options?
Find out if you’re eligible for unemployment benefits.
If you were laid off through no fault of your own, you might be eligible for unemployment benefits. These benefits can help you cover your basic expenses while you plan out your next steps. You’ll need to check with your state’s unemployment office for more information.
Talk to your creditors.
If your financial assessment shows that you will have a hard time making your loan or credit card payments immediately after a layoff, talk to your creditors. Your loan servicers and/or credit card companies may have relief policies that can help you out temporarily due to the hardship of being laid off. Do your best to protect your assets and your credit history during difficult financial times by being proactive.
Talk to your utility providers.
Similarly, if your financial assessment shows you’ll have a hard time making utility payments in the near-term, reach out to them to see if they have any hardship relief such as lowering your rates.
Consider a temporary or part-time role.
While you are looking for your next full-time job and source of income, it may relieve some stress for you to bring in income from a temporary or part-time role. Even if it’s a position outside of your field, you may be able to get hired faster while you’re exploring the job market.
Take advantage of government assistance programs.
Beyond unemployment benefits, government assistance programs may be able to help with food stamps, rental assistance, job placement, and more.
Turn to your support system.
Turn to your support system and let them know what you’re going through. Your friends and family can help out in many ways. Aside from them helping financially, they might be able to help you with child care, job opportunities, emotional support, and more.
For most people, getting laid off is a difficult and stressful experience. Take the steps you can to maintain your health, stay focused, and protect yourself financially. Know that you can get through this challenging time by focusing on the things you can control.
