Yahoo Finance I Survived a Layoff by Making These 4 Money Moves
According to the Bureau of Labor Statistics, more than 1.5 million people were laid off in January of this year. Plus, it seems that every time you scan the headlines, you see more companies reducing their workforce and more people nervously looking for a new job.
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However, while the news is concerning, you can financially survive the event and minimize the pain of a layoff. Read on for the story of someone who did just that — and tips to help you prepare for and overcome this potential challenge.
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Aitzarelys Negrón: Accountant to Business Owner
Aitzarelys Negrón, certified public accountant (CPA) and founder of Strategies and T.E.A., said, “I had been working at a [major] accounting firm since 2015 before being laid off in the fall of 2020. At that firm, I was an external auditor for almost five years, and in the final year, I was working in our Financial Accounting Advisory Services group.”
She survived her layoff by making these four money moves.
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Building a Financial Cushion
“Prior to being laid off, I had already [been] building a financial cushion — which I like to call my ‘Financial Runway’ — for about three years. This savings, along with severance, gave me peace of mind that I would be able to cover my expenses,” said Negrón.
Reducing Spending
Negrón continued, “The first thing that I did was identify how much cushion I had available. This allowed me to determine how many months I could be without work. I then eliminated all non-essential activities to reduce unnecessary spending.”
Creating a Job Search Strategy
Then, Negrón wasted no time trying to secure another role. “I organized my job search by creating a marketing plan for myself and a tracker to monitor all positions I applied for, including those found by my recruiter.”
Finding Additional Income Sources
“Once I started working again in January 2021, I began identifying additional sources of income, as the [COVID-19] pandemic showed that one income stream is too close to none. I began renting my car on Turo until Airbnb picked back up,” said Negrón.
She continued, “I then began building my business, Strategies & T.E.A., which launched in January 2022. With my business, I make the path to sustainable financial freedom easy to understand by coaching others in overcoming their limited beliefs around finances and teaching them how to leverage zero-based budgeting to regain control of their money.”
Hindsight Is 20-20
“If I could have done anything differently, it would have been to tap into building a side hustle earlier,” said Negrón. “I think that we can get comfortable and over-depend on our jobs, which really limits us. With that said, for anyone thinking about entrepreneurship, I want to remind you that having your own business is a lot of work and takes time. Keeping a job while you do that is, in my opinion, extremely beneficial.”
How You Can Survive a Layoff
There are several things you can do to promote your financial recovery after a layoff, including:
Prepare for the event in advance. Build an emergency fund, reduce your debt and establish a bare-bones budget.
Look for a job before you need one. Keep your resume updated and network with recruiters and other professionals regularly.
Sell unwanted or unneeded items to make some fast cash.
Explore passive income ideas to help keep you afloat while you look for a new full-time job.
Negrón offered this advice: “Start now and start small. The key to building sustainable financial freedom is to make small changes that make a big impact. Immediately, pay ‘future you’ FIRST.
“Set up an automated transfer on payday to move money into a high-yield savings account. Then, identify your top three financial goals and assess your spending. How do your top three spending categories align with those goals? Use that information to create a realistic budget that gets you closer to those goals.”
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This article originally appeared on GOBankingRates.com: I Survived a Layoff by Making These 4 Money Moves
