You Got Laid Off: Now What? Your Next 4 Financial Moves

I have been part of a layoff. It was a lifetime ago and it was in my career track before I was in tech (so, I guess that makes it 2 lifetimes ago). It was the early 90s. It was a moribund field that spiraled into life support and remains so today. The layoff was a blessing in many ways though, because I hopped out over to tech. And starting in tech in the 90s in Seattle was like catching lightning in a bottle. But it was still traumatic and it stuck with me for a very long time.

Life is unpredictable except in one key way:  You will get hammered. And not just once. You likely will get hammered a few times you didn’t anticipate.

And a key way for life to hammer us is for us to lose our job. Because that’s our lifeline in so many ways, isn’t it? Without income, everything stops.  Except bills. Those don’t stop. And the need to pay for things we and those we care for need.

OK, so you’ve been laid off. Here are your next 4 financial moves to allow yourself breathing room to focus on your next career move.

  1. Have a Family Meeting: Be candid and direct about what happened. Ask everyone to pitch in and to cancel what they feel can be canceled: Trips. Dinners. A new iPhone. New furniture. Entertainment. Anything that costs money, is not a necessity, and can be canceled. Then, circle back around and cancel more. You can always reschedule. You can always resubscribe. You can always pick those things back up after financial equilibrium returns. You are not hurting your kids. They are learning a life skill from this: The ability to discern the difference between what matters and what doesn’t. Resiliency and grit are priceless life skills. This is the 1st round of looking at where your money is going.
  2. Find Liquidity: OK, you have your family’s support and there’s transparency around what happened. Now look at your reserves. What cash do you have? This can be in your checking, savings, CDs, and brokerage accounts. You need to make it last until your next paycheck.
  3. Cut More Spending:  What expenses cannot be cut? Not what can be cut, but what cannot be cut? Those are the only things that stay. You are doing this to give yourself breathing room to pursue a new job, and each thing you and your family can cut just provides that much more room for you to be successful and make the next best move for your work-life. This is the 2nd round of looking at where  your money is going.
  4. Lifestyle Review: What are the Whys behind your lifestyle? Are any aspects wrapped around pride? Around status? Around entitlement? This isn’t me being judgemental. Remember, I have been here too. But you likely see a pattern: Cut. Review. Cut. Review. This is the 3rd round of looking at where your money is going.

And from there, knowing you have your family’s support, you are able to move on, to the next step, which is thinking through what you want this new phase of your work-life to look like.

It goes without saying that not having to unduly be concerned about money while pursuing the next steps in your work-life frees you up to pursue the most optimal position you next want.

When I was laid off way back then, it was traumatic. I was young and I was single, but that made it feel lonelier. It was just me figuring out where to go from there.

I feel grateful that things worked out for me, but I too had to learn real fast which things could be cut and which things had to stay.

When I got my 1st job in tech, I was making less than my old job, but because I had gone through the financial moves above, I was able to live in my new pared down lifestyle until my income recovered (#1 above was with my roommate’s dog).

Having your financial house in order literally buys you time when life happens.

So, why make it harder on yourself and your family (even if that family is your roommate’s dog) by not having your financial ducks in a row?

Having your ducks in a row doesn’t mean you have already reached financial independence.

It also doesn’t mean you don’t have any debt.

What it does mean is you and your family know where the money is going. It also means you have a contingency plan for when life hammers you.

I have helped many, many people navigate layoffs and navigate other financially traumatic events. It’s never easy to have these things happen to us and it’s always scary when they do. Having your financial ducks in a row doesn’t solve it, but it sure does make it more navigable.