A Financial Plan for When (If) You Get Laid Off

We’ve all seen the news about the Times-Picayune no longer publishing on a daily basis, and the reduction in staff that will certainly follow such an announcement.  Beyond the obvious effects on all of us as readers, the lives of dozens if not hundreds of the employees who will be laid off are thrown into turmoil who are all facing a lot of difficult decisions in the aftermath.  It’s an unfortunate reality of the world we live in that news of layoffs is becoming all-too common.  I’ve been through it (I was laid off by Janus Mutual Funds in 2001 after the tech-stock bubble of 2000) and many of my friends have been as well.  The fact that it’s more commonplace doesn’t make it any easier to deal with.

So what can you do when your financial world changes in a moment?  Start with the essential questions that I’m sure you have.  I think what you need to know right away is:

  • Is There A Severance Package?  If there’s additional money that you can expect which can help you with your transition, or is the check in your hand the last one you’ll be getting?
  • What’s Happening With The Health Insurance Plan?   Are employer-subsidized health insurance benefits going to continue throughout the severance period, or possibly longer?  Do we qualify for COBRA?
  • Is There Job Placement Assistance?  Has the company contracted with a placement firm to help those that have been laid off find new employment?
Once you’re past the initial shock, start to look ahead.  Here are 7 things to consider in those coming days:
  1. No Snap Decisions.  There are a lot of decisions to be made, but rushing decisions often leads to bad decisions.  Don’t put a lot of pressure on yourself to figure everything out the day you receive your paperwork.  Instead, take a deep breath and:
  2. Reconnect to Your Vision.  What would you do if you could do anything?  What have you been telling yourself that you’d always want to try?  Are there items in your answers that are worth pursuing at this time?
  3. Get Organized.  There will be a lot of decisions to make, and lots of deadlines to keep track of.  Without the routine of a daily job and the calendar at the office that you’ve become accusomted to, you can start to lose track of a lot of small details.  Get a calendar that you can trust, and start to put the important deadlines on them.  When do you need to turn in your COBRA paperwork?  Are there any deadlines around rolling over your 401k?
  4. Communicate With Your Colleagues.  If you were part of a larger-scale layoff, chances are you know many other people who are going through the same challenges you are.  Can you share questions and answers with some of your friends that you trust?
  5. Preserve Cash.  It may take longer than you think to land the new job you’ve been hoping for, or it may not offer some of the benefits that your previous job did.  Saving your cash can give you more choices and stability while you work your way into the next phase of your professional life.
  6. Remember That You’re Not Alone.  There are people around you who love you and who are there to lend a hand.  Be thoughtful and reach out to them.  You’d want to do whatever you could to help them if the shoe was on the other foot, so don’t let your ego stop you from asking your friends for introductions, job leads, or just a shoulder to lean on.
  7. Believe in Yourself and the Future.  Know that transitions are always hard, and know that you’ll come out of the other end stronger for it.

With some focus and smart decisions, you can land on your feet and hopefully look back one day at how far you’ve come from these difficult times.