{"id":6671,"date":"2023-07-13T06:00:00","date_gmt":"2023-07-13T13:00:00","guid":{"rendered":"https:\/\/www.quicken.com\/blog\/?p=6671"},"modified":"2024-11-18T10:19:13","modified_gmt":"2024-11-18T18:19:13","slug":"how-to-prepare-for-a-layoff","status":"publish","type":"post","link":"https:\/\/www.quicken.com\/blog\/how-to-prepare-for-a-layoff\/","title":{"rendered":"How to Financially Prepare for a Layoff"},"content":{"rendered":"\n<p>Losing your job can be an extremely distressing experience \u2014 the loss of income can jeopardize your financial well-being, and being jobless has been a well-documented cause of mental anguish, stress, and depression. However, it\u2019s important to remember that losing your job is <em>not <\/em>the end of the world.&nbsp;<\/p>\n\n\n\n<p>Job loss doesn\u2019t have to be catastrophic \u2014 the key is to have a plan in place. If you\u2019re concerned about being laid off in the near future (or if you\u2019ve recently been let go), here\u2019s how to plan and prepare for your financial situation.<\/p>\n\n\n\n<p><strong>How to prepare financially for a <\/strong><strong>layoff<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Figure out your monthly budget<\/li>\n\n\n\n<li>Create a layoff strategy<\/li>\n\n\n\n<li>Supplement your income<\/li>\n\n\n\n<li>Stay ready, just in case<\/li>\n<\/ol>\n\n\n\n<p>Ready to learn more? Let\u2019s break it down step by step.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">1. Figure out your monthly budget<\/h2>\n\n\n\n<p>Your first step to financially prepare for a layoff is to figure out what your monthly budget is. In order to plan and prepare for a period of joblessness and reduced (or no) income, it\u2019s important to know what expenses you\u2019ll need to cover.<\/p>\n\n\n\n<p>Think about where your money is going each month \u2014 are you paying rent or a mortgage? Do you have a car payment? Credit card minimum balances or student loan debt? Streaming services and Spotify? You\u2019ll need to aggregate all of your outgoing expenses for food, entertainment, vehicle costs \u2014 everything you spend regularly on each month.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Seeing what you really need<\/h3>\n\n\n\n<p>In the course of defining your monthly budget, you might come across some expenses that you might not need anymore (more on this later). This is a great time to consider your wants versus your needs \u2014 especially if you\u2019re facing an extended period of reduced (or no) income!&nbsp;<\/p>\n\n\n\n<p>On a basic level, our needs are the things that we just simply cannot go without \u2014 they\u2019re essential expenses. We need a place to live, we need to eat everyday, we need to pay the utility bills that service our electric and gas, and we need to get from point A to point B. Wants, on the other hand, are non-essential expenses \u2014 new Ray Ban shades, a Gibson Les Paul, a trip to Fiji, and so on.&nbsp;<\/p>\n\n\n\n<p>If you\u2019re looking at an upcoming layoff, you\u2019ll want to only pay for your needs at this point. However, it\u2019s important to remember that emotional needs count, too. Keep the small discretionary expenses that do a lot for you, like a cappuccino at your favorite cafe or buying a book at a used bookstore.&nbsp;<\/p>\n\n\n\n<p>You\u2019ll also need to include minimum debt payments with your needs \u2014 you don\u2019t want to tank your credit score!<\/p>\n\n\n\n<p>Here\u2019s a quick list with a few potential needs:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rent or mortgage<\/li>\n\n\n\n<li>Utilities<\/li>\n\n\n\n<li>Groceries &amp; gas<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Credit card payments<\/li>\n\n\n\n<li>Car insurance<\/li>\n<\/ul>\n\n\n\n<p>If you have a health insurance plan through your employer, be sure to include that too.<a href=\"https:\/\/www.dol.gov\/agencies\/ebsa\/laws-and-regulations\/laws\/cobra\"> COBRA<\/a> may let you keep your health insurance with your current provider if you\u2019re laid off, but you\u2019ll have to start paying for it yourself. You\u2019ll also want to look into rolling over any retirement plan when you transition into new job, like your 401(k).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">2. Create a layoff strategy<\/h2>\n\n\n\n<p>Once you\u2019ve determined your monthly budget and have defined your month-to-month needs, you\u2019ll want to begin to create a layoff strategy. Consider this a financial plan to keep afloat and cut costs while you\u2019re on the job hunt.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Fast places to save<\/h3>\n\n\n\n<p>In the event of a layoff, you may need to cut back on unnecessary expenses while you line up a new job. The first step toward a plan is figuring out where you could cut back in a hurry \u2014 take a look at where your money is going and find places to rein it in.&nbsp;<\/p>\n\n\n\n<p>Here are some quick, easy places where most people could cut back in an emergency:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Streaming subscriptions<\/strong> \u2014 you don\u2019t need to go cold turkey, but weigh the options of having a Hulu, Netflix, MAX, and Amazon Prime video subscription; think about keeping only one.<\/li>\n\n\n\n<li><strong>Cooking at home<\/strong> \u2014 food costs are still soaring, and you\u2019ll really feel it at restaurants. Instead, save money by eating at the house.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Slash that grocery bill<\/strong> \u2014 find ways to save at the grocery store by buying generic brands, using coupons, and only buying exactly what you need, saving on food waste.&nbsp;<\/li>\n\n\n\n<li><strong>Walk or bike <\/strong>\u2014 if you live in a city, consider walking or biking to your destination instead of driving or Ubering.&nbsp;<\/li>\n\n\n\n<li><strong>Ditch the music subscription <\/strong>\u2014 we\u2019re not saying go without music, but we <em>are <\/em>advocating for getting rid of that Spotify subscription \u2014 you can stream tons of music for free on YouTube.<\/li>\n\n\n\n<li><strong>Mind the thermostat <\/strong>\u2014 whether it\u2019s a hot summer or a cold winter, you don\u2019t need to fully refrigerate or broil your home. Set your thermostat up a few degrees on hot days and down a few on cold ones to save a surprising amount of money on your utility bill.&nbsp;<\/li>\n\n\n\n<li><strong>Shorter showers <\/strong>\u2014 use less water around the house. It\u2019s better for the planet and can make your water bill lighter at the end of the month.&nbsp;<\/li>\n\n\n\n<li><strong>Unsubscribe button <\/strong>\u2014 take yourself out of the path of temptation and unsubscribe from marketing emails that inundate your inbox.<\/li>\n\n\n\n<li><strong>Hang at the library <\/strong>\u2014 get yourself a library card to save money on books, music, videos, and more! Just remember to return your rentals on time.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Planning ahead financially<\/h3>\n\n\n\n<p>If you don\u2019t suspect an immediate layoff, take advantage of those fair weather times to plan ahead. Here are a few great ways to protect your financial goals on an ongoing basis.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Take care of repairs. <\/strong>Whether your car needs new brakes or you need to put a roof on your home, don\u2019t put off repairs and maintenance. The last thing you need is a major repair expense at the same time as a layoff.<\/li>\n\n\n\n<li><strong>Shrink your energy footprint. <\/strong>Energy-efficient appliances and installations can be costly up front but can save you tons of cash in the long run. Consider switching to LED bulbs throughout your home, upgrading appliances, and replacing drafty windows.&nbsp;<\/li>\n\n\n\n<li><strong>Pay off <\/strong><strong>high-interest<\/strong><strong> debt. <\/strong>Whether it\u2019s credit card debt or a personal loan, pay off anything with a high interest rate as soon as possible. Getting ahead can reduce your monthly interest expense, boost your credit score, and improve your position with lenders if you need a loan later.<\/li>\n\n\n\n<li><strong>Start an <\/strong><strong>emergency fund.<\/strong> After you pay off any high-interest debt, start a savings account for your emergency fund and work toward saving up enough to pay your minimum monthly expenses for 6 months. These emergency savings are specifically for disasters like being laid off!<\/li>\n\n\n\n<li><strong>Take a \u201cfinancial inventory.\u201d <\/strong>Could you still afford that Mercedes-Benz without your current salary? Or that all-inclusive vacation in Cozumel you\u2019ve been thinking about booking? Preparing for a layoff doesn\u2019t have to mean giving up the things you love \u2014 it just means planning realistically so you aren\u2019t living too close to your financial edge.<\/li>\n<\/ul>\n\n\n\n<p>In a worst-case scenario, you might also have to cut back on things that are tougher to change, like housing or vehicle expenses. Think about that ahead of time \u2014 do you have family members you could move in with? Could you share a vehicle with your partner?<\/p>\n\n\n\n<p>Whatever your plan is, talk it over ahead of time with anyone who could be impacted. The last thing you need during an emergency is to count on help that might not be realistic.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3. Supplement your income<\/h2>\n\n\n\n<p>There\u2019s no two ways around it \u2014 losing your job sucks. However, we\u2019re living in the Golden Age of the Side Hustle! No matter your location, age, experience, and interests, you can almost certainly find something to supplement your income.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Side gigs and other sources of income<\/h3>\n\n\n\n<p>Here\u2019s the idea \u2014 no matter what your skills or interests are, find a way to start a side hustle <em>today<\/em>, and use it to begin paying off your debt and building your savings. It\u2019s incredibly helpful to have an income stream outside your normal salary to use specifically for paying off debt \u2014 and it can help you stay afloat when that salary is no longer coming in.&nbsp;<\/p>\n\n\n\n<p>Unsure of where to start? <a href=\"https:\/\/www.quicken.com\/blog\/23-ways-to-make-quick-money-in-one-day\/\">The world is your oyster!<\/a>&nbsp;<\/p>\n\n\n\n<p>Think about what you like doing, what skills you have, and what your time commitments are. If you have a car in good shape and you don\u2019t mind having a chat with strangers, you can make decent wages driving for Uber or Lyft. If you\u2019re an artist, you can sell your work online or find commissions around town. Do you have an idea for vintage fashion and spend tons of time in thrift stores? Reselling clothes can be lucrative, especially in an urban center.&nbsp;<\/p>\n\n\n\n<p>Having a side hustle is not only a great idea, but also it\u2019s never been easier. If the side gig is a new business you\u2019ve been wanting to launch, start now while you still have extra money! New businesses can take a minute to get off the ground \u2014 you don\u2019t want to start one while you\u2019re strapped for cash.&nbsp;<\/p>\n\n\n\n<p>You can also look into a classic part-time job, like working at a restaurant as a server or bartender, finding a gig at a retail spot, or working as a barista.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Unemployment benefits<\/h3>\n\n\n\n<p>If you\u2019ve been laid off, you may qualify for unemployment benefits. Remember, unemployment is <em>not <\/em>charity \u2014 it\u2019s public unemployment insurance that exists to help you get through tough times. Use it to supplement your post-layoff income.&nbsp;<\/p>\n\n\n\n<p>To find out if you\u2019re eligible for unemployment insurance, check in with the unemployment benefits office in the state where you were working. They can help you determine your eligibility and provide you with the paperwork you need to complete your application.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">4. Stay ready, just in case!<\/h2>\n\n\n\n<p>One of the best things you can do to prepare for a layoff is to stay ready for the job hunt \u2014 so you can hit the ground running if you need to find a new full-time job!<\/p>\n\n\n\n<p>In case you\u2019ve already been laid off, we\u2019ve included tips for catching up in a hurry:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Keep your interview wardrobe up to date. <\/strong>Ideally, you don\u2019t want to shop for new outfits when you just lost your income. No matter if it\u2019s in-person or on Zoom, you\u2019ll want to look professional. If you need to freshen up your wardrobe cheaply, try visiting thrift shops in wealthier neighborhoods. You can often find professional clothing that looks almost new.<\/li>\n\n\n\n<li><strong>Keep your LinkedIn profile up to date too. <\/strong>Whenever you get a big win at work, add it to your LinkedIn profile. Job recruiters are extremely active on LinkedIn, so be sure to use the kinds of keywords they\u2019ll be searching for when they want someone with your credentials. If you have to do this quickly, start with the highlights of your last few performance reviews.<\/li>\n\n\n\n<li><strong>Network, network, network. <\/strong>Relationships are incredibly important in life, and the business world is no different. Keep nurturing your network on a regular basis instead of waiting until you need help, and be sure to stay in touch with anyone who has been a true friend or trusted colleague. Need to meet people fast? Reach out to your closest friends as well as professional recruiters and let them know you\u2019re looking.<\/li>\n\n\n\n<li><strong>Grow your career. <\/strong>Don\u2019t be afraid to go after <a href=\"https:\/\/www.quicken.com\/blog\/how-to-get-a-raise\/\">raises<\/a> and <a href=\"https:\/\/www.quicken.com\/blog\/how-to-get-promoted-at-your-job\/\">promotions<\/a> when you\u2019ve earned them! Always look for opportunities to grow and continue in your professional development \u2014 going that extra mile can help you stand out in a sea of candidates. Plus, if you put some of that extra money toward your savings every month, you\u2019ll be in far better shape to survive life\u2019s rough patches.<\/li>\n\n\n\n<li><strong>Adhere to self-care. <\/strong>It\u2019s normal to feel worried after a layoff. Be sure to check in with yourself, feel the emotions that you feel, and do things to take care of yourself. Eat well, meditate, exercise, and surround yourself with people or experiences that lift your spirits no matter what \u2014 from your favorite movies to your best friends.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Move forward with confidence<\/h2>\n\n\n\n<p>A layoff, while stressful, doesn\u2019t mean that your way of life is in jeopardy. It\u2019s a bummer, sure. But every year, thousands upon thousands of people survive layoffs and come out on top.&nbsp;<\/p>\n\n\n\n<p>The key is to start planning as early as you can. Take on some side hustles, work on cutting costs, stay on top of the job hunt, and move forward with confidence. You\u2019ve got this.<\/p>\n\n\n\n<p>Want to build that financial plan the easy way? Simplifi can help you review your monthly expenses, create a personalized spending plan, pay down your high-interest loans, and hit your savings goals \u2014 all in under five minutes a week.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Job loss doesn\u2019t have to be catastrophic. If you\u2019re concerned about being laid off, here\u2019s how to plan and prepare for your financial situation.<\/p>\n","protected":false},"author":59,"featured_media":6674,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"69","_seopress_titles_title":"How to Financially Prepare for a Layoff | Quicken","_seopress_titles_desc":"Job loss doesn\u2019t have to be catastrophic. If you\u2019re concerned about being laid off, here\u2019s how to plan and prepare for your financial situation.","_seopress_robots_index":"","inline_featured_image":false,"footnotes":""},"categories":[69],"tags":[],"class_list":["post-6671","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-finance"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.quicken.com\/blog\/wp-content\/uploads\/2023\/07\/man-writing-in-notebook-while-holding-mug.jpg","_links":{"self":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/6671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/comments?post=6671"}],"version-history":[{"count":7,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/6671\/revisions"}],"predecessor-version":[{"id":6680,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/6671\/revisions\/6680"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media\/6674"}],"wp:attachment":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media?parent=6671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/categories?post=6671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/tags?post=6671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}