Layoffs are becoming more common across industries. Tech, media, and consulting firms are downsizing even during periods of economic growth. If your company has hinted at restructuring or your department is shrinking, now is the time to prepare. These seven money moves are designed to help you stay financially stable, reduce stress, and position yourself for recovery.
1. Audit Your Spending Immediately
Rumors of layoffs are circulating, and your paycheck still arrives on schedule. This is the moment to take control of your cash flow. Review the past 60 days of transactions and categorize every expense. Separate essentials like rent, utilities, and insurance from discretionary items such as dining out, subscriptions, and travel.
What you can do:Â
- Cancel unused subscriptions and memberships
- Pause non-essential spending
- Build a lean budget focused on survival expenses
Cutting costs before income stops gives you breathing room and extends your financial runway.
2. Build a Cash Cushion Quickly
Savings exist, but most of it is locked in retirement accounts or long-term investments. Liquidity becomes critical when job loss is imminent. You will need cash for groceries, rent, and insurance premiums. Selling investments may trigger penalties or taxes, so focus on accessible funds.
What you can do:Â
- Redirect automatic transfers from investing to savings
- Sell unused items online for quick cash
- Deposit bonuses, tax refunds, or side income into a high-yield savings account
According to Harvard Business School, layoffs often happen in waves. Having cash on hand helps you avoid panic and gives you time to regroup.
3. Secure Health Coverage
Your employer currently provides health insurance, but that benefit may disappear with your job. Medical bills can derail your finances faster than missed rent. COBRA allows temporary continuation of coverage, but costs are high. Marketplace plans or Medicaid may offer more affordable alternatives.
What you can do:Â
- Review your current health plan and note coverage end dates
- Explore healthcare.gov for marketplace options
- Check eligibility for Medicaid or state programs if your income drops
Health coverage protects you from catastrophic expenses and ensures continuity of care during uncertain times.
4. Protect Your Credit Score
Concerns about missing payments begin to surface as income becomes uncertain. Your credit score influences future borrowing, housing applications, and even job opportunities. Late payments can cause long-term damage, so proactive communication with lenders is essential.
What you can do:Â
- Contact credit card issuers and request hardship programs
- Ask mortgage or auto lenders about forbearance options
- Set up minimum autopay to avoid late fees
Preserving your credit score keeps financial options open and reduces stress during unemployment.
5. Explore Unemployment Benefits Early
Your department is shrinking, and layoffs seem likely. Unemployment benefits vary by state, and processing can take time. Preparing now allows you to file quickly and avoid delays.
What you can do:Â
- Visit your state’s unemployment website and review eligibility rules
- Gather documents like pay stubs, W-2s, and separation letters
- Understand how severance or PTO payouts affect benefit timing
Filing early ensures faster access to income support and helps you stay afloat while searching for new work.
6. Activate Backup Income Streams
Skills and hobbies that generate money become valuable assets. Freelance work, side gigs, and temporary jobs can bridge the gap between layoffs and full-time employment. Even small income streams reduce pressure and help maintain stability.
What you can do:Â
- List your marketable skills and explore freelance platforms
- Offer tutoring, consulting, or delivery services
- Monetize hobbies like photography, writing, or crafting
Diversifying income gives you flexibility and reduces reliance on a single employer.
7. Reframe Your Career Strategy
Emotional exhaustion sets in, and the future feels uncertain. Layoffs trigger grief, anxiety, and identity loss. UC Berkeley’s counseling guide notes that feelings of shock, sadness, and resistance are common before acceptance. Use this time to reflect and reset your career direction.
What you can do:Â
- Update your resume and LinkedIn profile
- Reach out to former colleagues for referrals or freelance leads
- Consider short-term certifications or online courses to boost your skills
A proactive mindset helps you pivot faster and seize new opportunities with confidence.
Layoffs are disruptive, but they do not have to be financially devastating. Auditing your budget, securing health coverage, protecting your credit, and activating backup income are strategic moves that build resilience. These seven steps are not just survival tactics. They are a roadmap for recovery and long-term stability.
