Taking On A Permanent Layoff: Managing Your Finances

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Meta description: Learn how to manage your finances after being permanently laid off. Here are some of the best tips and solutions that will help you survive a financial setback.

Losing your job can be a stressful and devastating experience. It's natural to feel overwhelmed when you receive news of a permanent layoff.

But don't give up hope! You can take control of the situation after a permanent layoff. This article will outline strategies you can use to avoid financial turmoil.

Learn how to make smart money choices, save more, and plan for the future—all at once. By implementing these strategies, you can move past this difficult period in your life with ease.

What is a permanent layoff?

A permanent layoff happens when a company restructures, eliminating an employee's position.

Taking On A Permanent Layoff Managing Your Finances

When this happens, the employee has no choice but to terminate their employment with the company.

This type of situation can be particularly challenging. It forces the employee to find a new job or pursue other career opportunities without any support from their employer.

It also means that they will not receive any severance pay as they would in other cases (e.g., a temporary layoff).

That's why it's vital to know that there are a lot of options available after you've been laid off. Exploring these can help you enjoy some level of financial security.

How to know if you've been permanently laid off

Knowing whether you've been permanently laid off can be a tricky situation. But it's important that you assess the situation before making any decisions about your finances.

First, examine the benefits you received upon your layoff. If you have received severance pay, then chances are it's a temporary layoff.

But if there is no mention of such benefits or if the benefit period has expired, there is a good chance that your employer considers it permanent.

Second, talk to human resources and get their opinion on the termination status

Ask what criteria must be met for an employee to become eligible for recall (if applicable). There are also cases of indefinite layoff, so make sure you ask about that as well.

If the terms for recall are nearly impossible for you to meet, then it's likely that the layoff is permanent.

Finally, look into local labor laws and regulations around layoffs. See if there are requirements that employers must meet when laying off employees permanently. 

This includes notice periods and entitlement rights when separating employees from the company.

Regardless of the type of layoff, you should get an advance notice of layoff from your employer. It should contain the reason for the termination of employment as well as the details on benefits or severance pay.

How to handle a permanent layoff

When taking on a permanent layoff, you should take into account its financial implications. Here are some ways you can manage your finances so that you don't suffer (too much) from it.

Be mindful of your current finances

As someone who has been hit with a permanent layoff, you must be mindful of your current finances. While it may feel like an overwhelming task to keep track of money, it's important to stay on top of what's happening.

Be mindful of your current finances

The first step is to take time to assess your financial situation. List down all your current expenses as well as how much money you have. Try to be as accurate as possible so that you can prepare your finances well.

The next thing to do is to create a budget plan. This will help you manage your expenses as you look for other income opportunities. You'll also be able to see where your money goes and thus adjust expenses where necessary.

Being mindful of your finances helps you get a better grasp of the situation, so you don't get too overwhelmed by making ends meet.

Budget wisely

Planning your finances effectively can help you to cut back on unnecessary spending. This is so that you can use the extra funds for bills or other expenses that must be covered.

Creating a budget is critical when managing financial concerns during a permanent layoff.

Make sure you calculate all your income sources. These include unemployment benefits, severance pay, pension payments, investments, and other assets.

Take any one-time payments from severance packages into account as well. Then, determine all the fixed expenses.

These include your rent, mortgage payments, utilities, and food costs. In other words, these are the things that must be accounted for each month.

Next, allocate money for potential emergencies. This would allow you to have funds available in case of an unexpected expense.

Finally, divide any remaining funds into what they will be used for each month. This allows you to customize your monthly budgets accordingly.

Budgeting wisely allows you to have an easier time adjusting to the sudden shift in your financial situation.

Look for other income opportunities

Finding other income opportunities during a permanent layoff is essential. Consider taking on freelance or consulting gigs that pay well and can offer stability. This kind of income will be an excellent addition to whatever money you have saved up.

Look for other income opportunities

You should also look into part-time jobs, and side hustles like tutoring or commissions. These jobs don't need to be long-term. They are meant to provide short-term extra cash until you find a more reliable source of income.

Additionally, consider taking advantage of platforms such as Airbnb and Uber. These enable people to rent their homes or provide rides using their own vehicles.

These platforms offer flexibility in terms of hours and location. It makes them ideal for people dealing with unemployment due to the COVID-19 pandemic.

The beauty of online and freelance jobs is that you get more control over your time. And you can take on different jobs at once to earn more. You may even find the time to be able to open a small business that could help with your finances further.

Finally, consider investing in stocks and mutual funds as another income opportunity. If done correctly, they could generate additional revenue. At the very least, they can provide significant capital gains over the long run.

Take the time to create a financial plan that considers your expenses and goals. This allows you to optimize your investments for success.

Stay informed

Staying up to date on the news is an integral part of managing your finances after a permanent layoff. It's important to know what is happening in the current economy and the labor market, as this could affect you directly.

Stay Informed

Keep an eye on government policies relating to benefits and other assistance programs

These can be favorable for permanently laid-off workers. Read about state unemployment benefits and any other applicable government aid. These can help ensure you get the financial support you need during this difficult time.

It's also helpful to stay informed on the news related to local events and businesses. They may offer great job opportunities or assistance programs.

Do your research to help ensure you don't miss out on any potential resources or benefits. While trying to manage your finances, you should also be on the watch for new opportunities.

Staying up-to-date on the news related to the labor market and employment opportunities can put you in a better position. You can be better prepared if unexpected circumstances arise.

And as soon as another job opportunity becomes available, you'll be able to jump at it.

By staying informed, you would find it easier to react if anything changes or something new comes up. It also allows you to take advantage of potential new job openings or programs that have become available since your layoff.

Ultimately, following the news can give insight into how to best manage your finances. With it, you can make optimal decisions during this unforeseen period in life.

Dealing with permanent layoffs

Layoffs have become more common after the COVID-19 pandemic greatly affected our economy.

And taking on one sure isn't easy. But with the right tools, knowledge, and attitude, you can manage your finances—even if everything else in your life is changing.

Remember to stay updated on the resources available to you. Create a budget that works for your lifestyle and income changes. And most importantly: keep an eye on the potential stability of your future.

You may not be able to control how long this lasts or how much uncertainty it brings, but taking control of what you can will make all the difference.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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