Your Layoff Financial Checklist

Experiencing a job loss can be a challenging and stressful time. I know, I’ve been laid off twice since starting my career. It’s an emotional experience for many reasons, and while finances are not the only source of stress you’ll go through, feeling like you have control over your money and livelihood will give you the confidence you need to navigate a period of unemployment. 

Here’s my checklist for when you find yourself the recipient of a separation letter.

1. Assess your financial situation.
   Take a comprehensive look at your finances. Determine how much you have in cash savings and what your essential monthly expenses are, then use these two numbers to figure out how long your savings can sustain your current lifestyle without another source of income. ($10,000 in savings and $2500 in monthly essential expenses is $10000/$2500 = 4 months of sustainability.)  

2. Create (or update) your budget.
   Tracking your expenses and spending should be a priority. You’ll want to focus on housing, utilities, food and healthcare and cut back on discretionary spending where possible. This will help buy you as much time as possible between jobs. 

3. Apply for unemployment benefits.
   You may or may not qualify for unemployment, but it is always worth filing a claim to be sure. File right away even if you receive severance and may not qualify until it runs out. You may not be impressed with the weekly benefit amount compared to what you’re used to seeing in your paycheck, but this temporary financial support can make a meaningful difference if you’re out of work longer than expected. Check with your local unemployment office or state’s website for eligibility requirements and application information. 

4. Be mindful of debt payments.
   If you have outstanding debts, making at least the minimum payments to avoid penalties and damage to your credit score will be a priority. It may be tempting if you receive a lump sum to payoff a whole debt balance, but you don’t want to give up your liquidity until your future income is more certain. Managing your debt will be like walking a fine line; you want to make prompt payments of at least the minimum due but avoid paying any extra until you can feel more certain about giving up your cash. 

5. Talk to a financial professional.
   Consider consulting a financial advisor or credit counselor who can provide professional advice tailored to your specific situation. They can help you make informed decisions, manage your finances effectively, and create a plan to keep you on track. 

6. Take care of your mental and emotional health!
   Job loss can take a toll on your mental health (again, I’ve been there!) Take time for self-care, be open to support from family and friends, and consider counseling or therapy. You may try to talk yourself out of spending money on things like a gym membership, a massage, or therapy sessions, but those are worthwhile expenses to maintain a positive mindset and resiliency while navigating this challenging time. 

Remember, everyone's financial situation is unique, so adapt these tips to your specific circumstances. Stay proactive, remain optimistic, and focus on rebuilding your career and financial stability.