It’s hard to stomach the reality of a job loss . . . especially when that loss results from having been laid off. Many times, a lay off comes as a surprise. And when it does, it can be hard to know what your next steps are—especially when it comes to your finances. If you’re wondering what to do after you’ve been laid off, you’re not alone. Here are a few steps to help you navigate these uncertain waters:
1. Negotiate your severance package.
If your company has offered you a severance package, that’s great. But did you know that you can negotiate the terms of your severance? This could include negotiating your amount of severance pay, how severance is paid, or even the exact date of termination.1 Your HR department may not agree to your negotiated terms, but it’s always worth asking.
2. File for unemployment insurance.
Depending on how long you worked at your company (and your salary amount), unemployment benefits can be helpful while you look for a new job and other streams of income. There are stipulations depending on the state you live and work in, but unemployment is definitely something that can help you get by. Visit the U.S. Department of Labor for more details.
3. Find new health insurance.
If you had insurance through your job, it’s time to start looking for new coverage. If you had a severance package, your health insurance may be covered through COBRA for a specific period of time. If you missed open enrollment, don’t worry. A job loss counts as a qualifying reason to receive coverage in the marketplace.
4. Don’t forget about your retirement investments.
Just because you were laid off doesn’t mean you have to leave behind your retirement savings. Instead, think about rolling them into an individual retirement account (IRA) or savings in general. If you had less than $5,000 saved, your previous company may require you to move it. And if you had less than $1,000, you may receive a check for that amount. Just make sure to put it back into a retirement account or you’ll have to pay a penalty for early withdrawals (not to mention taxes).
5. Start networking.
One of the best ways to find your next job is through your network. Who do you know that’s hiring? Get in touch with family and friends and let them know you’re on the hunt for a new job. LinkedIn is also a great place to look for jobs and connect with others who may need the skills that you have to offer.
6. Tighten up your spending habits.
If a job layoff came as a surprise, you’re probably finding yourself digging into that emergency fund more than you’d hoped. But that’s exactly why it’s there: for when life happens. As you figure out your next steps career-wise, the best thing you can do for yourself is adjust your spending habits. You might have to say “see you later” to your favorite coffeeshop for now. Shop with coupons and build your meals around the sales at the grocery store. Take a break from eating out for the foreseeable future. Do an audit on all your subscription plans and see what you can put on hold until you’re in a more stable place.
7. Contact your creditors.
Sometimes, a layoff means that you can’t quite pay your bills the way you used to. Especially if you’re in-between jobs. The best way to get ahead of your bills is by contacting your creditors and letting them know your current situation. Contact your mortgage company if you own a home, your landlord or rental office if you rent, and even your credit card company. Prioritize the money you have coming in and decide which bills need to be paid first.
8. Get a short-term job.
There’s nothing wrong with getting a short-term job just to bring in some quick cash. There are many jobs out there that will help you get started quickly. Some options you could consider include becoming a driver for Uber or Lyft, delivering groceries for Instacart, or seeing if your local coffeeshop needs some help.
9. Contact a financial advisor.
During periods of change and transition, consulting with a financial advisor can provide you with valuable advice, insight, and a better understanding of your finances. If you’re not currently working with an advisor, you may be missing out on the chance to receive guidance that is tailored to your specific financial goals. By consulting with someone who understands your unique needs, you can gain clarity during uncertain times and have a clearer picture of all the possible paths forward.
Navigating a layoff isn’t ideal . . . but you don’t have to go through it alone. Reach out to a SageSpring Wealth Partner—We’d love to help you rebuild a solid financial foundation. Speak to an advisor today.
