The Single Best Financial Move to Make After Being Laid Off

Unfortunately, layoffs have been a hot news topic lately. Most workers only consider how they would handle a layoff once it happens to them. But it's better to know what to do before that happens so you know what steps to take. 

If you're ever laid off from work, give yourself grace and take time to process this life-changing reality. But it's wise to get your finances in order after taking time to process the news. Here's one move you should take after being laid off from a job. 

Reduce your expenses to stretch your dollars further 

Most people file for unemployment immediately after discovering they've been released from their jobs. This is a solid strategy because there may be several weeks' delay while you wait for your claim to process and receive your first check. 

But there's another financial move you can take to set yourself up for success as you adapt to your recent life change. You should review your finances and find ways to reduce some of your ongoing expenses. 

Some expenses, like your mortgage payment, will remain the same regardless of your current employment status. But if you can trim some unnecessary spending, you'll reduce your monthly expenses. Doing this can allow you to stretch your emergency fund savings further. 

You can do this by taking the following steps. 

1. Make a list of your must-pay bills

Take inventory of your monthly expenses and list the bills that must be paid. Examples include your housing expenses, utility costs, and insurance. You'll also want to include debt-related expenses like credit cards and auto loans. These are the expenses you'll continue to pay in full. 

2. Review your bank and credit card statements to tally up other costs 

Next, you'll want to get a feel for what other expenses you've been paying. This may include streaming app subscriptions, takeout and dining purchases, groceries, and any other shopping. 

You can familiarize yourself with your spending habits by reviewing your recent bank account and credit card statements. Tally up your recent purchases to see how much you've been spending. You can trim some less-necessary costs like takeout and subscription costs.

3. Set a spending budget for variable expenses 

Some costs, like variable expenses, can't be eliminated but can be reduced. Unlike fixed expenses, variable expenses fluctuate. One example is groceries. You might spend $650 at the grocery store in January, then $400 in February. 

Expenses like this are necessary. You have to eat! But you may be able to adjust your shopping habits to reduce your spending slightly so it's more consistent going forward. 

Now that you know how much you're spending on your other living expenses, you can set a budget for variable costs like groceries. If you struggle with this task, consider using one of the best budgeting apps so it's easier to track your spending and stick to your goals.

It pays to keep your living expenses to a minimum

If you've recently lost your job, keeping your living expenses to a minimum can be beneficial. Stretching your money further can buy you time to find another job. 

If you have money in your savings account, you can use this money and other funds like severance pay or unemployment benefits to cover your living expenses without racking up expensive credit card debt. 

Don't give up hope if you've lost your job. While it may take time to land a new role, you will find one. For additional tips, check out our personal finance resources.