A few weeks ago life was good and things were going along swimmingly. I could go to Whole Foods and pick out whatever organic produce I wanted without looking at the price tag. My wife and kids could shop without waiting for a holiday sale. Date nights were at nice restaurants and movies included multiple items from the over priced confectionary shoppe. I could even cover a large and unexpected car or appliance repair without much stress or having to max out my credit cards. I was making plenty of money for my family to live on, take a few holidays and was comfortable and feeling financially secure.
And then I wasn’t. All it took was one meeting with HR and a simple sentence, “We are being acquired and as part of the reorganization, you are being laid off” to cause my heart to feel like it dropped through my feet and my brain to run amok with the thought of “Oh Crap.” But the panic was brief, and thanks to a number of years of being financially savvy I was well prepared for the moment.
The first thing I did was to check my financial position and was thrilled to find that by having money auto deducted from my pay check for an emergency fund, I had managed to save over 8 months of expenses in just a few years! It also helped that I spent my 20’s and 30’s following smart financial principles and learned to keep lifestyle inflation in check while my income grew.
The second thing I did was file for unemployment (see benefits in your state). I was only getting a month of severance and was not owed any vacation. And my friends who have been through something similar in the past convinced me that taking unemployment was not something to be ashamed of. I earned it through the unemployment taxes I paid while working.
The third thing I did was apply to jobs. I am still on this third step and actively applying/networking, but am happy to report that I am nearly as comfortable and carefree (well almost) as I was a few weeks ago. I know I have the means to support myself and my family for quite some time and can take the time to apply to better jobs and maybe even follow my passion to start a new business. I even take time to exercise and go running by the lake near my house (the trees are so colorful this time of year!) and definetly enjoy a nice respite from the 9-5 grind.
So to all who are in a similar boat or may face this situation at some point, Don’t worry. If you are smart about your finances (start now if you are not!), you will be fine. And thanks to all my friends and family – the important people in one’s life – your discussions, questions, and advice over the past few years led me to having financial security when I needed it the most.
This was a guest post by reader Jeff Stiles. I hope others in this situation or having been through a layoff can add their perspective in the comments section below.