How to Financially Survive a Layoff
October 05, 2016
A recent survey by the John J. Heldrich Center for Workforce Development at Rutgers University found that one in five U.S. workers has been laid off in the past five years and about 22% of those who lost their job still haven’t found another one. Those who did find work had a difficult time with their job search and the effects of unemployment.
One of the biggest factors to consider when getting laid off is money – how will you be able to pay your bills? If you have recently been laid off or feel that your job may be at risk, you may want to start preparing yourself by following these tips:
1. Start a budget
The first step is to determine your budget, the minimum amount of money you need to cover the basic needs such as food, housing, utilities and debt payments. You will also want to check with your state’s Unemployment Agency to see if you will qualify for benefits and if so, the amount.
If your expenses are greater than your income, you will need to re-evaluate things. Are there non-necessities in the budget that you can cut? Do you have other sources of income such as savings?
2. Understand Your Employee Benefits
Make sure you fully understand your benefits in the event that you lose your job. You will want to be sure whether or not you will still receive health coverage and if so, what the costs are. Also look into if you are offered a severance package and what it all entails.
3. Cut Back
Your income is going to be drastically less than when you were employed and the best way to save money is the cut back. The first areas to look at are things like going out to eat, hobbies and luxuries such as getting your nails done, etc.
6. Prioritize Bills
If it comes to this, you will want to prioritize which bills need to be paid first. For instance, it is better to be late on your medical bill than your mortgage. It is also a good idea to let your lenders know about your financial situation beforehand.
A lay off is never good news, but it is not the end of the world. This is the exact reason we constantly stress the importance of building up your emergency savings. If you foresee a layoff in your future and would like our help in setting up your budget, please contact our office at 763-231-9510.