Learning that you will lose your job through no fault of your own brings on the worst feeling in the world: hopelessness. Over 10 years ago, I was laid off from my first paid job in the museum field, and my finances quickly fell into disrepair. Even though I received unemployment benefits, I couldn't afford the mortgage on a house I shouldn't have bought, and I watched my credit score plummet as a result.
But alongside the negative effects of layoffs, there may be some silver linings. Here are some ways to improve your financial future, even if you've lost your job.
Better control your budget
It's a scary situation to suddenly find yourself without income. One of the first actions you should take in that case is probably to dig into your household expenses to see what can be canceled or put on hold, and what you'll have to pay regardless. If you were previously a little loose with budgeting, being laid off may give you a better idea of where your money goes each month. There are streaming services here and internet prices are skyrocketing. If you haven't taken a close look at your bills lately, now's a good time to do so.
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This doesn't mean you have to cut all fun spending from your budget forever (though it's a good idea to cut it between jobs). That's a terrible way to live and probably unsustainable. Personally, I appreciate being able to make more frivolous purchases when I know for sure that it won't negatively impact my personal finances.
May prioritize emergency savings
In an ideal world, if you were laid off, you would have an emergency fund to cover your living expenses until you find gainful employment. But this is the real world. According to SecureSave, 63% of US employees could not cover an emergency of $500 from their savings. If you are among them, you should do everything you can to cover your expenses during your period of unemployment (make sure you are collecting unemployment insurance or receiving severance pay from your previous employer). hoping).
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Once you're back on your feet, especially if your new job allows you to enjoy a higher salary, consider making emergency savings a priority in your finances. It can be difficult to come up with the money to save, so it's a good idea to treat contributions to your savings account like a bill you have to pay. You might also consider automating the transfer of money from your checking account on payday. If you don't have to remember to save, there's no chance you'll forget.
Have the opportunity to claim your career and salary
In some cases, losing your job through a series of layoffs can be a blessing in disguise. If you hated your job and wanted to get better, you might have struggled to polish your resume and explore new opportunities. After all, it's hard to break out of inertia. But having work pulled out from under you means you have to take action. Once you have healed your wounds, you need to reach out to your network, put the end date of the job you left on your resume, and look for another job.
Financially, it may be better to start a new job as soon as possible, but please resist the urge to apply for just about any job you can get. Tailor your resume to the role you actually want and focus on being the best candidate for the job.
In the meantime, find salary data for your field and roles in that field (Glassdoor is a good place to look). Once you start interviewing, go into the interview knowing what salary is fair and reasonable given your experience and don't be afraid to advocate for yourself.
You may find the motivation to start a business
If your job is taking more and more of your enjoyment out of life and you're wondering about self-employment, being laid off can be a good excuse to consider your options. Ideally, when starting a business, you have time to build up a financial cushion upfront, perhaps by getting the business off the ground while gainfully employed elsewhere. After being laid off, you don't have this luxury. But if you've already saved up money to start something new, a layoff may be the boost you need.
Being fired from your job is a traumatic event, so you should take time to accept it before you take action. But if you can use this opportunity to organize your finances, start saving for emergencies, and improve your working life by getting a better job or starting a new business, you can eventually get laid off. A world of good could come from this.
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