Getting laid off can be one of the scariest and most stressful situations. Not knowing how to pay your bills or if you’ll be able to find another job is overwhelming. So where do you start? Let’s talk about how to managing budgeting after getting laid off.
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What to do after getting laid off?
First of all, don’t panic. You will have to make a lot of decisions during this time and you don’t want to be making them when you don’t have a clear head. Creating a plan is going to help ease some of your stress, so take some deep breaths and get to work.
The first thing you need to do is figure out where you currently stand. If you haven’t been budgeting up to this point, you need to sit down and figure out what your fixed expenses are. Go through your bank statements and make a list of all your fixed expenses – i.e. rent, utilities, phone bill, car payment, etc. You want to know exactly what bills you have to get covered this month.
Next, figure out what money you currently have. Do you have any savings? What do you currently have in your checking account?
How do you budget after a layoff?
Now that you know where you stand, you can figure out what your next steps need to be.
If you have some savings, subtract this month’s expenses from that amount to figure out if you have enough at the moment to pay your immediate bills. The main goal of your budget at this point is to have enough money coming in to cover the bare minimum of expenses.
Since you will have limited income, you want to cut out everything that isn’t necessary. Cancel any subscriptions or luxury expenses. Your spending should be a bare minimum. That means no going out to eat, no random shopping, and no browsing Amazon. Spending money you don’t have on things you don’t need is just going to make your situation that much more stressful.
Should you file for unemployment?
If you were laid off from your job you should be eligible to file for unemployment in your state. You should totally do this as soon as you can. Unemployment can help fill the gaps between what money you currently have and the bills that are going to start coming due. And there’s NO SHAME in needing some help when something unexpected happens.
There are different rules for when and how you file for unemployment based on your state and situation. Look up the requirements in your state and get the application process started. You will have to provide documentation to prove your past employment and income, so start gathering all of that so you’ll be ready.
How do you get health insurance?
Health insurance can be another worry. You don’t want to put yourself in an even worse financial situation if you got sick or hurt before you could find another job.
Contact HR at your last job and find out how long your health insurance will last. Sometimes companies will have a grace period before your coverage will end. If this is the case, it will give you a little bit of time to figure out your options.
If you are under 26, you do have the option of getting put back on your parent’s insurance. If this is an option, you want to get your parent to start the process asap.
You can also look into your state’s healthcare marketplace options. Usually, this is pretty expensive, but it may be your only option until you can get another job. You may also be eligible for Medicaid if you have no other source of income.
How can you replace your income?
Start looking at options for replacing your income as soon as you can. Dust off your resume and start applying to job boards. Also, keep in mind – yes, you want to replace your income quickly, but remember that you don’t want to end up miserable at a job either.
If you already had a side hustle, lean into that until you can replace your full-time income (unless you want to take this as a sign to lean into your side hustle and build a business!). You can also pick up a part-time job if you need to until you can replace your full-time income.
Getting laid off can be a very scary time, but creating a plan to replace your income and use the money you do have wisely will help reduce a lot of the stress. Don’t be afraid to ask for help and remember – you can totally handle this!