12 tips for staying afloat after losing your job
If this was television, the time would be around 10 a.m., and you'd be sitting in a darkened bar, staring into your third or fourth Scotch, wondering how to go home and tell The Spouse you've lost your job.
A bit clichéd perhaps, but a lot more plausible than the reality of 2020, the year that started with such financial promise and then devolved — is still devolving — into scenarios so increasingly bizarre we barely react to them anymore. A deadly coronavirus pandemic? Grocery shelves emptied of cleaning supplies, food and toilet paper? Stay-at-home orders. Masks no, then masks yes. Bars, restaurants, gyms, hair salons closed. A collective breath-holding. Restrictions loosened. A new surge of infections. Press replay.
"This was the year I was going to get that raise," you thought. Now it's" I'm being laid off ."
Now you have a mortgage or rent due, a car payment, maybe some children ... and barely anything in savings.
What do you do now?
First, don't panic. That's the initial advice from financial advisors Erin Nelsen, a fee-only certified planner and partner with Asset Planners in Cypress; Chris Browning, a financial analyst who created and hosts the "Popcorn Finance" and "This Is Awkward" podcasts ("Where We Discuss Finance in About the Time It Takes to Make a Bag of Popcorn"); and Louis Barajas, a fee-based certified financial planner at MGO Wealth Advisors in Irvine and author of several books, including "My Street Money," "Overworked, Overwhelmed & Underpaid" and "Small Business, Big Life."
Lots of people who started the year with steady, seemingly solid employment are now out of work due to coronavirus. The 4% unemployment rate that looked so rosy in January is now at 11% nationally and nearly 15% in California, according to the Bureau for Labor Statistics, so you're certainly not alone.
We asked Nelsen, Browning and Barajas for advice on what people should do after losing their jobs. All three agreed that the first step (aside from avoiding Scotch at 10 a.m.) is to stay away from the blame game, especially self-blame.
"It takes a huge mental toll; the fact that you've had this massive financial disruption in your life through no fault of your own," Browning said. "Give yourself some grace, and a break, because in a lot of these situations, there's nothing you could have done to make things go differently."
Browning said he tasted the poison of self-blame after he and his wife put $27,000 on their credit cards the first few years of their marriage, more than half of their household income. "I really beat myself up about that," he said. "'I went to school for this,' 'I should have planned.' ... I thought about it all the time, even at work. How could I have let things get so bad?"
He and his wife made a budget — several, actually — and ultimately paid off the debt in 2 1/2 years, but the remedy started with talking it out, he said, with his wife and a close friend, who listened without judgment. "You want someone who can be kind to you in their responses, not someone who will beat you up," Browning said.
And if you're honored to be chosen as the designated listener for an out-of-work friend and family member, Browning said it's important to remember your role is supportive listening. "Avoid grilling them with questions like 'What happened?' or — the Mom thing — 'Did you say something rude in a meeting?!'"
The biggest mistakes with money are made out of fear or greed, Barajas said. "You don't want to panic or get scared; that's when the old reptilian brain kicks in with financial knee-jerk reactions. You want to be proactive and prepare."
In other words, don't max out your credit cards while pretending everything will be OK. There's no shame here, Browning said. We're all in the same crazy boat of uncertainty. "This situation is so unprecedented, no one has been prepared for this or even experienced this in our lifetimes."
Instead of wallowing or hiding, now is the time to take a deep dive into your financial situation and make a plan, said Nelsen, who has two college-age children living at home because they both got laid off from their part-time jobs. Both her children were eligible for unemployment benefits, and they're living at home for free, but in exchange, Nelsen said she insisted that they make up budgets and save as much of their money as possible in case they're still out of work when their unemployment checks run out, which in California is after 26 weeks.
"I had them make an inventory of all their expenses and really be truthful about what's necessary and useful versus discretionary spending," Nelsen said. "With my kids, as with most people, you may in your head say something is a 'need' but it's really just a 'want.' They don't 'need' to have their Spotify subscription to live."
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