Smart money management for Everyone
Preparing for Layoffs
You’re sitting at your desk on a perfectly normal Tuesday afternoon. The sun is streaming through the window, you’re finally making progress on that project, and your phone pings. It’s a meeting invite from HR for first thing tomorrow morning. Sent to you and a few others. Suddenly, your stomach drops. Your mind starts racing. That one question, the one we all push to the back of our minds, comes screaming to the front: What if there’s a layoff, will I spared?
It’s a cold fear, isn’t it? One that has nothing to do with your skills or your work ethic. It’s about the market, company decisions, things far beyond your control. That knot of anxiety in your chest is something millions of people know all too well.
That fear doesn’t have to be your reality. That question doesn’t have to hang over you like a dark cloud. Surviving a layoff, and even thriving after one, is about preparation. And preparation is something you can absolutely start today.
Fear to Preparedness
The first step to answering that scary question is to kick fear out of the driver’s seat. When we operate from a place of panic, we make rushed, short-sighted decisions. Instead, let’s reframe this. Think of financial preparedness not as a reaction to a potential layoff, but as a form of empowerment. It’s you taking control of your own narrative.
It’s like knowing how to swim. You don’t learn because you’re planning to fall off a boat tomorrow; you learn so that if you ever do find yourself in deep water, you know how to stay afloat. Building your financial safety net is exactly the same.
You’re learning to swim in the economic waters, so you’re never caught gasping for air.
This shift changes everything. Instead of dreading that HR meeting, you can walk in knowing that whatever the outcome, you have a plan. You’ve got your own back. And that confidence? It often shows up in your work, making you even more valuable where you are.
Your Emergency Fund is Your Life Raft
If there’s one thing you take away from this, let it be this: your emergency fund is non-negotiable. This is the money that keeps the lights on, puts food on the table, and allows you to think clearly if your regular income stops.
You’ve probably heard crazy figures that make your eyes water. Forget those for a second. The goal is to start, not to be perfect.
Start Small: Aim for a starter goal that covers one month’s essential expenses. Not your full salary—just the absolute must-pays: rent, food, utilities, critical transport.
Build Up: Once you hit that first goal, celebrate! Then, slowly work your way up to three months of expenses. This is your solid baseline.
The Gold Standard: If you can, stretching that to six months’ worth is the dream. It gives you a massive runway to find a new role without compromising on your worth or taking the first thing that comes along.
Where do you keep this money? Not under your mattress, and not invested in anything risky. It needs to be easily accessible, a simple savings account or a low risk investment (that's liquid) is perfect. The point isn’t for it to grow aggressively; the point is for it to be there when you need it.
Knowing Your Numbers Inside and Out
You can’t build a strong plan if you don’t know what you’re working with. This means getting brutally honest with your income and spending.
Grab a notebook or open a spreadsheet. For one month, track every single thing you spend money on. Everything. That roadside snack, that airtime, that subscription that renews automatically. You’ll be amazed at where the money goes. This isn’t about cutting out all joy; it’s about awareness. Once you see the patterns, you can make conscious choices.
Now, categorize your spending:
Essentials: The non-negotiables (housing, food, utilities, debt payments).
Lifestyle: The nice-to-haves (eating out, entertainment, new clothes).
Future You: Savings and investments.
Seeing it all laid out shows you exactly how much you need to cover your basics each month (your emergency fund target) and where you might have some wiggle room to save more.
Trimming the Fat Without Feeling the Pinch
With your spending laid bare, you can see opportunities. This isn’t about deprivation; it’s about optimization. It’s finding money that’s slipping through the cracks and redirecting it to your safety net.
Look at your Lifestyle and Essentials categories. Ask yourself:
Subscriptions: Are you using all those streaming services and app subscriptions? Can you share plans with family?
Phone Plans: Are you on the best deal for your actual usage?
Eating Out: Could you plan one more homemade meal a week? Those savings add up fast.
Impulse Buys: Implementing a 24-hour "cooling off" period before any non-essential purchase can work wonders.
The money you save from these areas goes straight into your emergency fund. You’re not losing anything; you’re trading a few temporary wants for massive, long-term peace of mind. It’s the best trade you’ll ever make.
Your Action Plan.
The meeting happened, and you’re being let go. What now? This is where your preparation pays off. Instead of chaos, you have a clear, calm checklist.
Breathe and Process: Give yourself 24 hours to feel whatever you’re feeling. It’s a shock. It’s okay. Don’t make any big decisions in the first flush of panic.
Understand Your Exit Package: Carefully review your severance agreement. What are you owed? How will your final pay and any benefits be handled? Don’t be afraid to ask questions.
Tighten the Belt Immediately: Activate your "lean" budget. Cut all non-essential spending. This isn’t forever, it’s to make your emergency fund last as long as possible.
Explore Your Options: File for any available income support you might qualify for. Every little bit helps stretch your runway.
Get Your Documents Ready: Update your CV and LinkedIn profile immediately. Reach out to your network, not with panic, but with a clear message about your situation and what you’re looking for next.
Having these steps ready turns a crisis into a manageable project. You’re the project manager of your own comeback.
Diversifying Your Skills and Your Income
Putting all your eggs in one basket, a single salary from one company, is a risk. The most resilient people have multiple streams of income. This doesn’t mean working three jobs until you burn out.
It could mean:
Turning a hobby into a small side business, coding, writing, baking, crafting.
Doing freelance projects in your field of expertise.
Teaching online courses or offering tutoring.
Managing a small rental property or investing in a collective venture.
Even a small amount of extra income each month does two powerful things: it adds another layer to your safety net, and it proves to yourself that you are capable and resourceful beyond your job title. Your worth is not tied to one company.0
You May Ask
How long does it typically take to find a new job after a layoff?
It really varies based on your industry, experience level, and the job market at the time. Don't compare your journey to anyone else's. The key is to start your search immediately, leverage your network, and stay consistent with applications. Your emergency fund takes the pressure off so you can find the right job, not just any job.
What’s the first thing I should do with my severance pay?
Resist the urge to spend it on something big! The absolute smartest move is to park it in your emergency fund or a separate savings account. It is your primary financial bridge to your next opportunity. Once you’re securely in a new role, then you can decide how to best use any leftover funds, perhaps for investing or paying down debt.
Is it really possible to save when I’m barely making ends meet now?
This is the most common and valid concern. The answer is yes, but it requires a ruthless look at your priorities. Start with an amount so small it seems silly, maybe just 100 a week. The habit of saving is more important than the amount at the beginning. Look for one or two small expenses you can permanently eliminate and automate that tiny transfer. You won't even miss it, and watching it grow will motivate you to find more ways to save.
Your Peace of Mind is Priceless
That haunting question, What if there’s a layoff, will I be spared?, loses its power when you have an answer. And your answer becomes a confident "Yes, I will." Not because you’re lucky, but because you were prepared.
The journey to financial resilience isn’t a sprint; it’s a steady walk. It’s about making small, consistent choices that add up to monumental security. Start today with what you have. Open that separate savings account and set up a small automatic transfer. Track your spending for just one week. Make one conscious decision to save instead of spend.
You are building more than just a bank balance; you are building confidence. You are building options. You are building a life where a sudden meeting invite is just a meeting invite, not a source of dread.
That peace of mind? It’s worth every effort.
