Preparing for Layoff

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Amanda Witman's picture
Amanda Witman
Status: Peak Prosperity Team (Offline)
Joined: Mar 17 2008
Posts: 409
Preparing for Layoff

It's happening to a lot of people.  My husband was laid off last week, my dad was
laid off before Christmas, and my brother-in-law was laid off last fall.  With the recent news of large companies
laying off thousands, it's a sure bet that some people reading this site will
need this info. In case there was ever any doubt, this site is for everyone - people with assets and incomes, and people without.  We are all in this together.

This post is going to be long, because I have a lot of ideas and
I have learned a lot of things.  If
anyone has ideas to add, please post them.  (For the record, I do NOT want this to turn into a
discussion about whether or not people should accept government
assistance.  I mention it because some
people will find themselves choosing or needing to accept it.)

When I was a young mother living on a tight budget in a well-to-do town,
the husband of a good friend of mine was laid off.  From my perspective, they were in excellent shape -
he was given two years' severance at half his current salary, and even his
severance was significantly larger than my family's income.  Yet my friend was totally and completely
freaked out.  I didn't understand it then
- but I do now.  Anything that rocks or
threatens our sense of security can feel utterly devastating. Regardless of your situation, if you take steps to prepare
yourself, you will feel more secure, and security is priceless.

If you haven't already done the Self-Assessment, take some
time to work through it.  In case of a
layoff, you'll mainly need to make sure your family has food, warmth (in
winter) or coolth (in summer), and a way to pay or reduce/eliminate the bills.  Chances are you won't lose your water or power
or sanitation or shelter or transportation, at least not immediately, so I'd
focus first on food, warmth/coolth, savings, and income.

Walk yourself through the steps you'll need to take to claim
unemployment - assuming you qualify. 

If you can't get unemployment pay, figure out how you'll
make ends meet temporarily or long-term without a job.

If you're planning to rely on unemployment pay to pay the
mortgage or other essential obligations, keep in mind that in some areas
unemployment checks are currently taking 4-6 weeks to start up.   For that reason, make it a priority to put
at least two months' worth of mortgage payments into savings.  Build as large an emergency fund as you can.  (Bonus: If you keep your emergency fund in cash,
you'll also be prepared for a possible bank crisis.)  If you can't put money aside, figure out your
strategy for getting your bills paid during that time.

If you think you will need to refinance your home for a more
manageable monthly payment (or get any other kind of loan/refinancing), do it
now, while you still have an income.  It's
unlikely that you'll get approved if you are unemployed. 

Start thinking now about where you can live if your home
gets foreclosed on.  It's not fun to
think about, but it's better to make a plan now than struggle at the last
minute.  

If you have financial resources that are not yet liquid,
take steps to liquidate them or at least determine what would be necessary to
do so on short notice in case you find yourself needing that money.

If you're paying on Federal Student Loans, you can file for
forbearance as soon as you're notified of a layoff.

Go through your bills now and prioritize; figure out where
you have wiggle room if you have to delay a payment.  Call your creditors and utility companies
and ask to negotiate a lower rate (apparently many places are doing this for
the asking right now). 

If you think you might need to avail yourself of government
programs, such as WIC, food stamps, fuel assistance, or medical insurance, make
the phone calls and get the forms before you think you will need them.  All of these applications are taking longer
and longer to process, due to increased demand.

Stock your pantry, especially with staple foods that your
family already eats.  Store what you use,
and use what you store.  Find the most
inexpensive sources of these foods.  Keep
a basic inventory of what you have, and know where the gaps are so you can strategically
fill them. 

Practice eating more cheaply, reusing leftovers, etc.  Better to learn now when you still have the
budget to make mistakes.

Consider stocking up on anything that will help your family
feel less deprived - within reason, of course.

Stock up on nonfood items.  If you find yourself in a position of needing food
stamps, they can only be used for food; they can't be used for toilet paper or
soap or shampoo or cleaning products or first-aid supplies or vitamins or pet
food or any other taxable items.

Consider replacing disposable items with reusable
items.  Read up on frugal living, if you
haven't already.  Prepare yourself for
tightening the belt.  Start living more
frugally and save more money that way. 

Consider ways you can procure food without money.  Gardening (freezing/drying/canning),
foraging, bartering, etc.

Scope out the resources in your community.  Where are the food banks, the community
suppers, the shelters?  If you don't need
this info, you may run into someone who does.

If it is winter, make sure your heating fuel is topped
off.  You don't want to find yourself
broke with no heating fuel in cold.

Think about anything your family might need in the upcoming months and consider
taking care of it while you still have an income. Priorities can change
drastically when income is gone.

DO NOT consider your credit card to be a
"resource."  Do not dig yourself
a hole with your credit card by using it for things like food, unless you are starving/freezing
- and maybe not even then.

Take a quick inventory of what you have and what you
need.  Clothing items?   Tools? 
Household supplies?  Warm
bedding?  Take steps to stock up now on
things you know your family will need. 

Take care of medical/dental issues while you still have good
insurance, assuming you do have it.

If you use a car, make sure it's in working order and not
needing repairs.  Jobhunting is not easy
with a broken car.  

Update your resume. 
Rekindle old contacts.  Think
about how you will make an income if and when your current situation ends.  This might be the time to take a part-time
job or to have a nonworking spouse start looking for work.

Tend to your relationships with your loved ones.  Layoffs can be hard on a marriage. 

Figure out what things inspire you and boost your own
spirits. 

Be creative, be flexible, and stay optimistic.

suesullivan's picture
suesullivan
Status: Gold Member (Offline)
Joined: Oct 6 2008
Posts: 305
Re: Preparing for Layoff

what a great, useful post, Amanda. Thank you for taking the time to compile it.

All I can think to add is to be aware of and to recognize if/when it arises in you the mind's habit of going to the erroneous interpretation of circumstances as permanent, pervasive and personal. DH picked this up from the book  "Learned Optimism," a very science-based study of pessimistic and optimistic explanatory styles and the very different outcomes each style brings. Pessimistic explanatory style will interpret a setback in worklife as being permanent and personal (I'm not capable or wanted anymore)  and the problem to be pervasive throughout one's life, rather than confined to the realm of paid employment. Pessimists tend to not see how strong their spiritual, familial or social lives are, when, for example, their work experience is negative. The story we tell ourselves frames, even creates, our entire experience of life. So it's good to be aware of it and not buy into a particular story if it's not helpful.

fwiw,

Sue

Arthur Vibert's picture
Arthur Vibert
Status: Silver Member (Offline)
Joined: May 16 2008
Posts: 116
Re: Preparing for Layoff

Excellent post. Thank you.

The only thing I would add, which is related to Sue's post, is that change is not something to be feared - it is to be embraced. Change is the nature of life, though we like to delude ourselves into thinking we can avoid it. Just because things change for the worse doesn't mean they can't change again for the better. Focus on preserving what actually matters - and this typically won't be material things other than that which keeps you alive and relatively comfortable. 

I'm optimistic about my own life, not because I expect things to get better in the world - I don't - but because I have a strong mutually supportive network of friends and family. To me, that's what matters.

Arthur 

jerry_lee's picture
jerry_lee
Status: Martenson Brigade Member (Offline)
Joined: Sep 24 2008
Posts: 126
Re: Preparing for Layoff

Yes to all of the above. I'll probably print off Amanda's post to share where needed.

Thanks Sue for the reminder of differences in orientation. I tend toward optimism(although I am aware we are walking through dire straits) and always expect to find a way. I sometimes forget there are other ways people have learned to be. 

Linda K's picture
Linda K
Status: Bronze Member (Offline)
Joined: Aug 23 2008
Posts: 56
Re: Preparing for Layoff

Hey all,
Thanks for the posts. I'm in CA and can't think of one
friend who hasn't experienced family members being laid off or had
their hours cut back. I agree with all planning and scale down advise above.

One thing I've noticed is how differently individuals react to
job loss. If your ego or sense of self is tied to working it's much
harder to face the morning where you don't get up and go to work. It
sometimes take being extra vigilant around those you love to keep in
mind their feelings may be very different from your own in this regard.
Unless you're already thinking about working less or retiring it takes
time for most people to go through the stages of shock and resentment
almost anyone feels when they first get fired.

My personal mantra for those depressed days when I need to come up with a reason to get out of bed is "make something beautiful".

Linda K's picture
Linda K
Status: Bronze Member (Offline)
Joined: Aug 23 2008
Posts: 56
Re: Preparing for Layoff

forgot to add


I'm emphasising the last few lines of Amanda's initial
post. Watch out for loved ones, keep rekindling your own inspiration,
and find reasons to be optimistic.

britinbe's picture
britinbe
Status: Gold Member (Offline)
Joined: Dec 28 2008
Posts: 381
Re: Preparing for Layoff

Fantastic thread!!

Much of what society and individuals profess to need is little more than window dressing and unnecessay. This really came home to me when I cleared out my parents home after the death of my father about 18 months ago; so much emphasis had been placed on the need of "stuff" to provide their (perceived need of) basic security.  Health and the love and support of family and friends should lead to the best happiness life can ever offer no matter what happens to you materially

Linda K's picture
Linda K
Status: Bronze Member (Offline)
Joined: Aug 23 2008
Posts: 56
Re: Preparing for Layoff

Britinbe

Death is a big teacher isn't it? The ultimate bottom line.

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