How to take care of your personal finances after a layoff

How to take care of your personal finances after a layoff

Getting laid off can throw you for a loop, financially and emotionally. In the weeks after you’ve cleaned out your cubicle, when you find yourself living on dwindling severance, it can be easy to get into a funk about your future prospects. That is, if you’re not blowing your budget on full-blown funemployment.

But that wasn’t the case for Celeste an Atlanta-based project manager. Earlier this summer, when she was downsized from her job at a healthcare technology company where she’d worked for five years, she hit the ground running to figure out her financial plan and next steps in her career. Celeste, 29, spoke to about her experience.

So you got laid off. That stinks. What were your first thoughts, financially?

My first thoughts were about health insurance. I have a chronic disease that requires more than $1,000 a month to regulate without coverage. I tried to work with my former employer to figure something out—even went so far as to volunteer to work for free if I could keep my benefits—but had no luck there. The most straightforward option was COBRA, but that would also require that I pay $800 a month before copays, which would still ultimately be unsustainable.

I ended up reaching out to my doctor, and she was an incredible help! She immediately rewrote my prescriptions to allow me to call in refills before I lost coverage. We’re also working together to get me on a program for discounted medicine, which will be a life-changer.

That’s one of the main things I’ve learned from all this: Don’t be afraid to ask for help!

Once you worked things out in terms of health coverage—which is critical—what were your next steps?

I got organized! I broke out an old planner that had been sitting on my bookshelf, and immediately wrote out things to accomplish every day for several weeks. The goals were split according to level of importance: An urgent task might be filing my unemployment claim, a less urgent task might be rummaging through my closet for interview outfits. Then I tried to accomplish as many tasks as possible each day. This really helped me avoid getting complacent and sitting around the house feeling sorry for myself. I tried to stick to a 9 to 5 schedule as much as possible, making sure I kept nights and weekends free to relax and maintain a social life.

I also immediately put an “emergency” budget into place. I sat down with my partner and calculated money coming in from his job, our savings, and my severance, plus money outflow to our bills and monthly expenses. Once we crunched the numbers, we realized that after some adjustments, we could actually cover everything for longer than we thought. I also did a bunch of little things: called in some small “friend debts” people owed me, cancelled subscription services I didn’t need (so long, Birchbox!), and finally took care of a bunch of online purchases I’d been meaning to return.

Kudos on remembering the small stuff. It adds up! And it’s great that you thought of “friend debts.”

Yeah, I bought DragonCon tickets for a few people a couple months back, so I had to give out some gentle reminders. But now I can actually go to without worrying about the cost of really expensive lunch at the cafeteria! (Buying lunch at science fiction conventions is notoriously expensive.)

How has the job search been going?

The day after I was let go, news of my company’s layoffs started spreading in my network. I woke up the next morning with dozens of messages and emails from friends and colleagues, all of whom wanted to help out. People sent me URLs on LinkedIn, passed along names of recruiters they’ve worked with, informed me of openings in their companies, and volunteered to be references. It was an incredible reminder that if you work hard and are a decent person, all will end up coming back to you—something I ended up jokingly calling “passive networking.” With all of this support, all I had to do was finish updating my résumé and send it out.

A former client at my old job contacted me about an opportunity to work for them, so after being flown out for an interview last week I’m hoping to hear something back from them soon!

How would you say your financial mindset changed since your layoff?

Drastically. I’ve never been good with finances and budgeting because it seemed so intimidating. This sudden change in my life forced me to confront a lot of those anxieties and fears head-on, and I actually found out it’s not so bad!

Me and my partner have been together for years but have always had difficulty talking comfortably about things like our credit scores and our savings. Now we’re able to discuss money way more easily, and start planning our financial future in a way that doesn’t fill us both with anxiety.

I’ve also learned about a dozen different recipes involving canned black beans, which are a delicious and inexpensive source of protein.

Mmm…enchiladas. Seriously, cooking at home is a no-brainer for saving money. Any advice you would give to someone to prepare financially for the possibility of a layoff? 

Get a good budget in place now! I wish I had been putting more in my savings every month while I was working. I am lucky enough to have a safety net and amazing friends and family, but I wish I had spent a little less money at Forever 21.

(Quotes have been edited for style and length.)

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