Key Steps to Prepare Financially
1. Document Your Positive Feedback
Before you leave your current job, make sure to save all the positive feedback you've received from managers, colleagues, and clients. This will help boost your confidence when job searching and can be useful for future interviews and applications.
2. Maximize Your 401(k) Contributions
If possible, front-load your 401(k) contributions by setting a higher percentage of your salary toward retirement savings. This strategy helps you take full advantage of your employer match before losing access to it in the event of a layoff.
3. Track Your Spending
Monitoring your spending is a non-negotiable step in financial planning. Apps like Rocket Money can sync with your accounts, categorize expenses, and help you understand where your money is going. Adjust any misclassified transactions to ensure accuracy.
4. Prepare for Increased Expenses
Losing your job can come with additional costs, such as health insurance. Research your options, including COBRA or marketplace health plans. Also, explore unemployment benefits and food assistance programs, such as SNAP, which can help cover grocery expenses.
5. Apply for Unemployment Benefits
Filing for unemployment is straightforward. Visit your state’s unemployment website, check your eligibility, and apply as soon as possible. You can also use online benefits calculators to estimate your weekly payments, which typically range from $40 to $450 per week.
6. Build Your Emergency Fund
A strong emergency fund is crucial. Many financial experts suggest saving 3-6 months of expenses, but given the volatility in tech, aiming for a one-year emergency fund is ideal. Use a budgeting template to calculate your average monthly expenses and multiply by 12 to determine your goal.
Smart Financial Moves to Make Now
1. Live Below Your Means
If you're still employed, challenge yourself to save aggressively. Consider buying a more affordable home than what you qualify for, sharing one car instead of owning two, and cutting unnecessary expenses.
2. Reduce Discretionary Spending
Eliminate non-essential subscriptions, limit shopping, and cook at home more often to save money. Small changes add up quickly and can significantly impact your savings.
3. Negotiate Medical Bills
If you're facing unexpected medical expenses, know that hospital bills are often negotiable. Many hospitals offer financial aid programs, which can help you save thousands of dollars.
Lean on Your Community
Layoffs can feel isolating, but community support is invaluable. Consider joining professional networking groups, like Tech Ladies, or ex-employee communities, to stay connected and gain job leads. You can also build informal support systems, like a "funemployment" group for socializing and mutual encouragement.
Prioritize Mental & Emotional Well-being
Beyond financial preparedness, taking care of your mental health is crucial. Whether through religious faith, meditation, or therapy, find a way to stay grounded and positive during this transition. Don't be afraid to ask for help—friends and family often want to support you, but they need to know how they can help.
Final Thoughts
Life can be unpredictable, but having a financial plan in place gives you stability and peace of mind. While layoffs can be daunting, taking proactive steps now will help you navigate this period with confidence. Remember, you're not alone—lean on your community, make smart financial decisions, and stay focused on your next opportunity.
Special thanks to Erika Ho, head financial coach at Holy Path to Fire, for sharing this information with the Tech Ladies Community! If you want to learn more about Erika's work as a financial coach, please visit her website: https://www.holypathtofire.com/
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