Layoffs happen.
Sometimes, there’s not much a business can do except cut some of its expenses. And, if the business is a large one, one of its biggest expenses is payroll. Having been laid off before, I realized it was something I couldn’t prevent from happening. However, what I could prevent was allowing myself to go into this downward spiral, which happens to some people after getting that notice. I’m an optimist by nature, so I’m always trying to think about how can I remain positive, even during a trying time. And so, that lead me to creating this quick list of things everyone should consider doing after getting laid off.
#1
Financial experts always tell you to save money for an emergency or that rainy day and that day has now arrived. This is important because you need to know if the money you have access to right now can cover your bills for the foreseeable future. Hopefully you have some readily accessible cash to cover all of your fixed expenses for the next couple of months. It’s recommended you have 4-6 months stashed away. If you did, you’re not really stressing about finding your next job. If you didn’t, you’re going to be a little bit more stressed. But, use this time to think about becoming a better saver once you land that next opportunity.
#2
Head over to annualcreditreport.com and run your credit report from all three of the credit bureau’s. In case you don’t have an emergency fund, borrowing money might be an option you have to consider. If so, it’s best to know how your credit looks at each of the three bureaus. Also, reviewing you overall debt situation will be helpful as you work on adjusting your financial plans now that you’re not employed. If you had been properly servicing your debt while you were working, hopefully you will still be able to do so going forward. This is one of those times where making the minimum payments is all you can afford to do. Yes, it’ll stink getting hit with those interest charges, but by making the minimum payment, you’ll stay in good standing.
#3
If you were participating in your employers retirement plan(s), then it’s time to think about what to do. Hopefully, cashing out some (or all) of those funds isn’t an option you need to consider. But, if you don’t have the cash reserves, then sometimes this might be your only option. If you don’t need to take a distribution, here are your remaining options: (1) leave things as they are (2) consider moving your funds (called a rollover) to your own IRA or (3) once you land a new gig, you might consider moving those funds over to your new retirement account. Honestly, your retirement plans aren’t going to be a high priority at this point but it’s good to at least know this is something you’ll need to revisit at some point.
#4
Since you don’t currently have the steady paycheck coming in, this is the best time to review your spending habits. You should start this process by reviewing the needs versus wants in your life. When the money is flowing, you “wanted” to live a certain way. That might not be sustainable for long without the steady cash flow. So, you may need to cut some things out until you get back on your feet. From the needs side of the house, identify ways to save money on things you constantly buy. For example, maybe you love buying name brand items. But now, it might make sense to try out some generic brands. Making small changes in how you live will be important and it’ll help stretch your dollars further.
#5
People always say they wish they had more time off. Well, now you’ve got it! I’m not suggesting you go on some elaborate vacation but at least you can start by sleeping in every day. When you don’t have a job, every day is a weekend. Now, many of your friends might still be gainfully employed but find some things to do that you’ve been meaning to do. One could be taking some free online classes to learn some new skill. Maybe you’ve wanted to binge watch some old TV series or movies. Maybe you’ve been wanting to write a book or grow your social media following but just couldn’t find the time to be creative. Well, all you’ve got is time now.
Losing a job isn’t the end of the world and it’s a great time to have some fun and hit the reset button. Get the rest you’ve wanted and prepare your mind for the next chapter. Once you start back working, you might miss your fun-employment time.
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