10 Steps to Take Control of Your Finances After Being Laid Off: From Benefits Review to Rolling Over Your 401(k)
Losing your job can be stressful, and it’s essential to take immediate action to manage your finances. Here are 10 steps to help you regain control:
Review your benefits: Check if you are entitled to any severance pay or benefits that may have been included in your employment contract. This could help you bridge the gap until you find a new job.
Assess your financial situation: Make a budget to determine your expenses and income. A budget will help you identify areas where you can cut back on spending and prioritize your bills.
Apply for unemployment benefits: If you are eligible, apply for unemployment benefits, which can provide temporary financial support while you search for a new job.
Evaluate your options for rolling over a 401(k): If you have a 401(k) plan with your previous employer, you’ll need to decide whether to keep it with your former employer, roll it over to an IRA, or move it to your new employer’s plan. Consider seeking the help of a financial advisor to make the best decision for your specific circumstances.
Consider your employer stock options: If you have employer stock options, carefully consider your choices, including selling the stock, holding on to it, or transferring it to a new employer’s plan.
Make a plan for paying bills: Prioritize your bills, focusing on necessities such as housing, food, and transportation first. If necessary, reach out to your creditors to negotiate a payment plan or request a deferral, or talk to a credit counseling agency.
Use your emergency fund: An emergency fund can help you stay afloat during a financial crisis. Try to have at least three to six months of living expenses on hand for peace of mind.
Seek additional income: Consider taking on freelance or part-time work to bring in extra income while you continue your job search.
Network and continue your job search: Stay active in your job search, and network with friends, family, and professional contacts to find new job opportunities.
Seek professional help: If your financial situation becomes overwhelming, seek the help of a financial advisor for guidance. Consider a fiduciary financial advisor so that you know the advice you receive is in your best interest.
It’s important to remember that losing your job is not the end of the world. By taking these steps and seeking professional help, you can help maintain control of your finances while you seek a new job.
Schedule a call with a fee-only financial advisor to discuss your situation and how we might help.
This material was generated using artificial intelligence (ChatGPT) and edited by RPA Wealth Management and Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.