Steps to Financial Stability After a Layoff

Being the sole or primary source of income comes with stresses that are exacerbated during volatile times. Layoffs are a major source of stress, particularly in the tech industry, where they seem to be common. There’s even a website, Layoffs.fyi, dedicated to tracking the latest news about layoffs and trends over the years. While you can't control layoffs, the stress they cause can impact your decision-making process.

When you fear losing your job, financial practicality often goes out the window. To set yourself up for success, you must evaluate your needs, wants, and debts. Then, create a strategic plan to address them, along with a timeline for when you may no longer be able to meet them.

Needs are essentials for your family, such as housing, utilities, and food. You should have a budget for these categories to determine if your unemployment benefits will cover them. If not, and you have an FHA-insured loan, you can request a forbearance by contacting your mortgage provider to see what options are available. It's important to do this before you fall behind on payments.

Wants, like vacations, should be reconsidered during unemployment. If a vacation isn't fully paid for in advance, it’s not in your best interest to proceed. Additionally, time away from the job hunt can be more stressful than relaxing.

Addressing credit cards, student loans, and auto loans should be a priority once you find out about your job loss. Federal student loans offer income-driven repayment plans, where payments are based on your income. Auto loans, like mortgages, may have options for deferral during financial hardships. For credit cards, if you are only paying the minimum amount, it might be best to speak with a representative to set up a payment plan, typically with a lower interest rate and fixed payments.

Many people try to withdraw from their retirement accounts, but this creates a short-term solution for a long-term problem. Additionally, improper use of these funds can result in significant tax repercussions. If you’ve recently been laid off and need guidance, reach out to me so we can keep your life on track.


Reference
​1.  Layoffs.fyi

Let's Meet Up