Getting laid off can feel overwhelming and stressful, and it’s something many people go through—almost 40% of U.S. workers have faced a layoff at least once. It’s completely normal to feel lost, but with a little planning, you can keep your finances on track and avoid making any hasty financial decisions that might hurt you in the long run.
Here’s a simple, seven-step checklist to help you manage your finances after a layoff. These steps will guide you on how to navigate this tough time without losing control of your financial well-being.
Seven-Step Financial Checklist for Layoffs
If you’ve recently been laid off, it’s easy to feel a bit lost. But taking some quick and strategic steps can help you stay organized and manage your finances while you search for your next job. Here’s how to start:
1. Request Important Documents Right Away
It’s important to get your paperwork in order early. Your employer may have a lot of other layoffs, so you don’t want to wait too long to request your documents. These documents may include:
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Layoff Letter: This will have details about your termination and any remaining benefits.
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Separation Paperwork: This may help with unemployment or other benefits.
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Employee Handbook: Check for policies about unused vacation days, sick leave, or PTO to ensure you get your final paycheck right.
2. Use Your Remaining Benefits
If your layoff includes continued benefits, like healthcare coverage, make sure to use them before they expire. For instance, you may have subsidized COBRA coverage for a few months.
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Healthcare: Schedule any pending medical, dental, or vision appointments. Get prescriptions filled, and request extra supplies like glasses or contacts.
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Flexible Spending Accounts (FSAs): If you have a balance, use it before the end of the year to cover medical expenses.
Taking advantage of these benefits can help you save a lot during your transition.
3. Apply for Assistance Immediately
One of the first things to do after a layoff is to apply for unemployment benefits. Processing times may be slow, so it’s important to apply ASAP. In some states, it may take up to 21 days to process your application.
Here are some other assistance programs you might want to check out:
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SNAP (Food Stamps): If you qualify, this can help cover grocery costs.
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Healthcare: Look into healthcare coverage through the Marketplace or Medicaid if you lose your employer’s plan.
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211.org: Use this website to find local community resources and programs available to you.
4. Re-prioritize Your Spending
When your income takes a hit, every dollar counts. It’s important to prioritize your spending and avoid making rash financial decisions, such as paying off old debt in full or prepaying your mortgage. Here’s a simple order for prioritizing your expenses:
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Necessities: Rent/mortgage, food, utilities, and medical needs.
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Secured Debt: Keep up with loans that are tied to property, like your car loan, so you don’t risk losing your vehicle.
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Other Essentials: Save money for occasional costs, like insurance premiums or vehicle registration.
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Unsecured Debt: If you can, make at least the minimum payments on credit cards or student loans to avoid damaging your credit. But focus on other priorities if necessary.
5. Reach Out to Creditors and Billing Companies
Don’t be afraid to ask for help. Many companies have hardship programs or can offer temporary relief for people in financial distress. It’s better to ask before you miss a payment, as they may be more willing to help you.
Here’s where to start:
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Student Loans: Contact your loan servicer to see if you qualify for an income-driven repayment plan.
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Utilities: Ask your utility companies if you qualify for programs like LIHEAP to help with heating or cooling costs.
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Phone/Internet: Check out Lifeline to reduce your monthly phone bill.
6. Cancel Unused Subscriptions
Subscriptions can add up quickly, especially when you’re not paying attention. Go through your recent financial statements and cancel any subscriptions you’re not using. Even if you use a service occasionally, consider pausing it until you’re back on your feet.
Cancel things like:
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Streaming services
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Magazines or online subscriptions
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Unused apps or software
These small steps can help free up some cash each month.
7. Roll Over Your Retirement Account
This step isn’t urgent, but it’s worth considering. After you’re laid off, you may be able to leave your retirement savings in your employer’s plan. However, there are good reasons to roll over your account:
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Fees: You may be charged higher fees than you would with a personal IRA.
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Forgetting About It: You might forget about the account or lose track of how to access it.
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Contributions: You can’t continue to contribute to your employer-sponsored plan once you’re no longer employed there.
If possible, roll your funds into your next employer’s retirement plan or an IRA. This way, you won’t face penalties, and your money can continue to grow.
Landing on Your Feet After a Layoff
Losing a job is a huge life change, but it doesn’t have to wreck your finances. By following these seven steps—taking quick action, cutting unnecessary costs, and asking for help—you can protect your finances while you navigate this challenging time.
The key is to stay calm, be strategic, and make thoughtful decisions. In doing so, you’ll have a better chance of landing on your feet and moving forward after a layoff.