The one gift you always hope to receive before the holidays is more time off. Of course, that’s paid time off. What you don’t hope for is that you walk in at the start of your shift on Monday right before the holidays to receive a big fat lay off.
Poor timing.
It definitely wins the award for that.
..and while I was still in utter shock I was also trying really hard not to smile and shout, “see ya later suckers!!” . ( Of course Mommy would never say such bad things. Felt like I should address my kids there for some reason. Ha ha ha)
But
I didn’t smile and I didn’t utter any self aggrandizing phrases.
Actually for all my joy, I was very much insulted. “You?!…. lay me?!! Off!” ….. I think not. I was suppose to get myself laid off. I was even reading how to engineer your lay off, but that, I had planned to execute after December so I could max out my 401k. Honestly March would have been better. But its November. November I say!!!!
(Sigh)
Well no use getting mad over spilled milk… Or however that goes.
The truth is, it happened and it wasn’t well timed. It was like most lay offs, out of nowhere. And it wasn’t just me, it was 35 or so other employees.
I was just one of the herd being unceremoniously shown the door.
But that was about all I had in common with that herd.
Diverting from the herd
Truthfully there was no herd upon my exit. As I had been the only office employee let go from 2nd shift. (Don’t feel too bad about that number I was the only 2nd shift office employee to begin with). So I didn’t witness the fallout. But I heard others had shed tears and even sat in their cars for over an hr in a daze.
I did run into 2 shop guys whom shared the same fate and one of them had just the week prior opened up about some financial challenges. I felt more sympathy and concern as we crossed paths.
What would become of this guy and his young family? Would he find something new quick enough? Would he have to settle for less pay just to secure a pay check? Or worse take out a pay day loan.
This is after all what most people concern themselves with after a lay off. I’m sure if you’re new here you’re wondering. Okay so what makes you so different.
Why on earth were you ready to Conga line out the door, when others were trying to make sense of the madness.
Laid off but not laid out
While a shocker, our family wasn’t beaten down by the news. And here is why .
- We had already paid off all our debt
- Which meant we had reduced our monthly expenses
- We reduced them so much we could and were living off of one income.
- We had a years worth of spending saved up
- And we live off of the previous months earnings giving us an extra month of cushion. (So November is funded by Oct paychecks and so on.)
- We were already planning for some time off in the future.
Basically, We made sure we had good financial footing long before the news and you can too.
Here are the things you want to start working on now while you have your J-o-b
Sadly this list isn’t going to help you if you were laid off yesterday and are in sink or swim mode. There is no quick fix for financial preparedness. But if your happy chugging along at your 9-5, don’t forget to set some money aside for unpleasant surprises like a lay off.
Are you ready?
So this isn’t for beginners your going to need more then a 1k emergency fund to make it through major financial crises. You need to start saving big money. You are going to want to move from the 1k cash cushion to the 3 month cushion, Then to 6 months, and THEN to 12 months. And if you dislike your day job like I did, your going to want to make it a priority and grow it quickly.
Lower your operating costs. Or in common household lingo, lower your monthly costs. You can do that by knocking out some debt. Big or small balance, ridding yourself of it will have a positive impact on managing a lay off. And just in case you have multiple debts in your name use the snowball or avalanche technique to focus on fully paying off one at a time.
You can also reduce your costs by choosing to be more conscious about your spending. Lowering that entertainment budget from $250 to $175 or even (gasp) $100. Will have a 2 fold effect. More money available to save and less you need to pay out in the future.
Reduce your monthly costs enough and you might even get to the point where you can happily live off one income.( in a 2 income household). And maybe? the big key is, you should just plan to live off of one income indefinitely.
Living off of one income gives you a big boost in savings and building a cash cushion but most importantly if you can live off of one income. You won’t even need to draw on your emergency money if you do experience a lay off. Because one salary fully funds your happy lifestyle.
If you’ve been laid off recently and weren’t financial ready, I’m sorry, this isn’t a quick fix you can take to the bank. But if you have a job and live in a 2 income situation I strongly encourage you to design your life that it is completely sustainable on one income… And if you really want to challenge yourself make it the lower income.
Love your job or hate it, I would recommend you always plan for a lay off.
Life now
My lay off was over a month ago and we had an unusually expensive month in November as we also experienced our move to a more expensive area to be closer to work. Even so our active 401k is still being contributed to as are the IRAs. My lay off has not deterred our saving goals for the year.
Come January hopefully we’ll have realized some saving from the move and as customary for the beginning of the year we will have to reassess our budget and priorities.
But our current income and safety net will/ has afforded us plenty of room for the rest of the year. So unlike my former coworkers who need to rush out and secure new employment before the Christmas rush.
I am looking forward to our 2 week Michigan trip.
I am nestling in for the long haul of full time parenthood. Afforded to me by good financial know how, savvy spending and sturdy savings.
Do you have any advice for me. How should I set up my daily schedule to make the most of it?
Picture by: Gratisography
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Well, now, that’s some timing for you. A shame you weren’t able to max out the 401(k) as originally planned but thank goodness you were already on track for an extended period of time off.
I’ve been laid off in the past for an extended period of time but even though I had enough warning to lay in stock for the winter, it was still stressful since I wasn’t far enough in my debt paydown to be comfortable. Still, I did manage to travel like I would not have done with a job, and I’m really glad that I did. I hope you’re in an area where you can take advantage of the (free/cheap 🙂 ) cultural offerings and really get to know your new city. I think that staying home full time with a little one can either be spontaneous and a bit exhausting or somewhat more planned and a little bit less exhausting. My days at home with LB became a lot easier when I imposed as much structure as you can with an infant!
Wow its a good thing you were far enough along so that you had the opportunity to travel. That is exactly what I’d be doing if I was single. Shipping myself off to some far off land. 🙂 good for you that you got to do that.
And I hear you about kids being very exhausting or just a bit… I am in the works of figure out a loose schedule for being at home…. I think it helps.
Oof, I imagine getting laid off is jarring even when you’re planning to leave on your own. Sorry the timing didn’t work out better for you. In theory, my dream would be to get laid off with a severance package the day before I plan to resign, but something tells me the odds of that are low.
Having a financial safety net is such a great feeling. It would be so frightening and devastating to be jobless without at least a few months’ savings built up.
Regardless of the circumstances, congratulations on starting your year off!
Thanks so much for the congratulations Matt!
It is good. Or else I might have kept postponing it forever.
It was unsettling even prepared so yeah I imagine it’s a complete nightmare if your not.
Well I hope you can negotiate a layoff. I would recommend reading financial samurai as he writes on the topic.
Sorry it didn’t quite happen like you expected. 🙁 I think you were as well prepared as you could be though, and you bring up some great points. With my new job it would be SO easy to finally loosen up and live a little, but I’ve been there done that before and when I was laid off I really struggled because of savings. I don’t EVER want to go back to that place again!!
That is a good point to take. To never put yourself in the uncomfortable position again.
But I would never accuse you of not living. You took vacations and trips and work out, sounds to me like you live a well balanced life as a freelancer even on a tight budget. Hopefully the surplus income serves only to magnify you current life. 🙂
Congrats on the new employment.
I remember the first job I was fired from. (Telemarketer. I was terrible.) I was just so pissed that I was being let go because I wasn’t someone who got fired! But then there was the immediate relief that I didn’t have to keep doing that.
Timing is rarely perfect — though this is a particularly nasty sucker punch — but I’m glad it goes along with the theme/aspirations you were forming already.
I like the motto you used: laid off, not laid out.
exactly , timing is probably never right.
Thanks
I love your positive attitude. And sounds like you are incredibly prepared which is wonderful. I hope you were also awarded a nice fat severance cheque. Here in Ontario, I believe if you are laid off it is one week of pay per year worked minimum. Usually big companies looking to avoid legal fights give much more. That was always my dream! hehe.
Enjoy your time!
Actually that was the most frustrating things of all and I can’t believe I forgot to address it in this post. I’ve worked there for over 5 yrs and they didn’t even give me a dime. They “generously” gave all laid off employees one month of health insurance.
Wow! You should have been entitled to so much more. 5 years is a long time to commit to an employer. Oh well, you are in a really good position and looking forward to the exciting parts of being away from a job. Well done!
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Sorry to hear you were laid off, but what an opportunity to try something new! And great tips for the rest of us. I actually just left my day job to focus full time on running a content marketing business. It’s a bit scary, but the idea of making it on my own and being able to employ people – rather than risk being laid off – is pretty exciting. So, great planning ahead and enjoy your year off! And you could probably make a few extra dollars freelancing if you wanted to.
Thanks Rob and congratulations on taking the jump to focus on your own business!
I am trying to get my writing chops up to par to execute on that idea.
Definitely agree, $1k isn’t enough for an EF. Good starter, but need to get it to 3-6 months ASAP, and more for irregular or risky work. I’m trying to work out how much cash I should keep atm (post FIRE) – thinking 12 months
We keep that much on hand right now, though it wasn’t intentional at first. It was saving for a Mini retirement trip and then for a house. And now we are at the point where we need to find new places to funnel it to. Since it is fully funded for a year. Have you read Millennial Revolution’s book Quit like a Millionaire. I believe they keep something like 5 yrs in cash. I think well do 2 just to have some cushion in a downturn. 🙂