Surviving a Layoff: Strategies for Managing Finances

Assess your situation:

Take a close look at your current financial situation, including your income, expenses, and debts. This will help you determine how much money you need to cover your basic living expenses and how long your savings will last.

Consider part-time or freelance work:

If you are unable to find a full-time job right away, consider taking on part-time or freelance work to help make ends meet. This can also help you stay active and engaged in the workforce.

File for unemployment benefits:

If you are eligible, file for unemployment benefits as soon as possible. These benefits can help provide some financial assistance while you look for a new job.

Evaluate health insurance options:

If you lost your job, you may also lose your health insurance. Consider your options for COBRA continuation coverage or purchasing a private or ACA health insurance plan.

Create a budget:

Develop a budget to help you manage your finances during this difficult time. Prioritize your spending on essential items such as housing, food, and healthcare. Cut back on non-essential expenses such as subscriptions and dining out. If necessary, look for other ways to meet monthly payment obligations, for example negotiating bills to stretch out payments.

Review other insurance benefits:

Think about other employer-provided benefits, such as life, vision and dental insurance and determine what benefits you may be able to keep and what benefits you may need to replace. If you have children or other dependents you should almost certainly keep or replace your life insurance. However, dental or vision insurance may or may not be advantageous to your bottom line depending on your family’s dental and eye health.

Network during your job search:

Use your professional network and job search resources to find new job opportunities. Develop a job search routine and be consistent in sticking to that routine.

Seek professional advice:

Consider seeking advice from a financial planner, career counselor, other professionals to help you navigate this difficult time. They can provide guidance on managing your finances and career during a layoff.

Understand 401(k) or other retirement plan options:

If you have a 401(k) or other type of retirement plan with your former employer, understand your options for managing your retirement savings. You may be able to leave your savings in the plan, transfer them to a new employer's plan later, transfer them into an Individual Retirement Account (IRA), or take a cash distribution.* Understand the advantages, disadvantages, fees, and tax implications of each option.

Be nice to yourself:

Last but not least take care of yourself. Your mental health can affect everything including dealing with finances and finding another job. Try to limit negative self-talk. This may be easier said than done but consider ways to relax and stay calm. Physical activity such as playing a recreational sport you enjoy, going for a hike or even regular walks can help quiet the mind. If you start feeling overly anxious or depressed about your situation, consider consulting a mental health counselor.