Savant Wealth Management

Twitter. Meta. Amazon. Salesforce. These corporate behemoths are among the latest to announce massive layoffs in recent weeks, due in part to aggressive hiring during the pandemic and a slowdown in e-commerce activity. As the Fed struggles to right the economy, even more layoffs are possible. If you’re in an industry where whispers of potential layoffs are growing louder, it can’t hurt to prepare financially – as well as emotionally — for a possible pink slip.

To Do Now

1 – Assess your emergency fund.

While there’s no “right” amount to have in your emergency fund, it’s not a bad idea to have at least three to six months’ worth of expenses saved, and potentially more if you anticipate a lengthy job search. Consider setting some additional money from your paycheck aside now to augment your emergency fund, just in case, and if you don’t have one, there’s no better time to start saving. Try to automate deposits from your paycheck to a savings account so you aren’t tempted to spend. Even having a few weeks’ expenses covered can help reduce your stress level if you’re laid off.

2 – Spend less.

Like many people, you probably have subscriptions you no longer use, memberships you could drop, or little luxuries you could easily live without. Take time now to look at your expenses and strategize ways to save, including postponing any major purchases, such as a home, a car, or taking a vacation. One option could be to plan your budget cuts in tiers, eliminating superfluous items now to save money, while planning larger cuts if you lose your job.

3 – Pay down debt if you can.

If you have a line of credit or credit card debt, look for ways to pay it down, or look for credit cards with lower interest rates that allow you to transfer your balance. Then, make a plan for how you will continue to pay these obligations if you lose your job.

4 – Look at other ways to make money.

Do you have a favorite hobby or particular expertise that you could turn into a side hustle without causing a conflict with your employer? If you’ve ever considered working for yourself, now could be a good time to create a business plan, start networking, and seek out potential customers. If you do lose your job, your side hustle could become your next career move. For people in their 50s or 60s, blurring the lines between work and retirement can be a great way to transition from full-time work to work on their terms. As Savant’s Chief Innovation Officer, Rob Morrison, noted in 2020, a “victory lap” career could be a rewarding next step for those at a career crossroads.

5 – Talk to your financial advisor about your options.

Your financial advisor can help provide guidance on how to budget, the tax implications and potential penalties for accessing money from your investment portfolio or retirement account, and prioritizing and managing your debt.

If You Lose Your Job

1 – Understand the terms of your separation.

Depending on your company and position, you may receive a severance package upon termination, and you may need to sign paperwork agreeing to accept the terms of the severance. If you are 40 or older, you must receive 21 days to consider the company’s offer, according to SHRM. Discuss any issues with an attorney before agreeing to sign.

2 – Consider your health insurance options.

You may be able to continue on your employer’s plan through COBRA for up to 18 months after your termination, but since you would assume the full cost of the premium, this may prove to be too expensive. If your spouse has insurance benefits through his or her job, you may be able to gain coverage as a dependent. Alternatively, you could seek coverage through the Health Insurance Marketplace. While open enrollment for this coverage generally takes place in the fall, loss of a job and insurance coverage would make you eligible for a special enrollment period.

3 – Apply for unemployment benefits.

If you need the income right away, don’t wait to apply for unemployment, since it can take several weeks to start receiving benefits. You can find a list of state unemployment offices through the U.S. Department of Labor’s website.

4 – Revisit spending.

With a potential severance, side hustle, and unemployment benefits, you may not need to make further spending cuts immediately but start now to identify both your short- and long-term needs, and budget accordingly. If you created a tiered system for trimming expenses, revisit it to make sure the list is still accurate, and consider when to progress to your next tier.

5 – Revisit your life and financial goals.

A major change in your life can bring an opportunity for personal reflection. Are you in the right career? What would make you feel fulfilled at this stage of your life? Discuss your thoughts with your spouse or significant other, and then consider meeting with your financial advisor to discuss any changes in your plans.

Layoffs and job losses can seem scary if you don’t have a plan in place to manage your finances without a steady paycheck. But losing a job can also present new opportunities you might not have considered before now. If you find yourself among the tens of thousands of tech workers now looking for a job, keep an open mind. Your next career move may be your best yet.


This is intended for informational purposes only and should not be construed as personalized financial advice. Please consult your financial professional regarding your unique situation.

About Savant Wealth Management

Savant Wealth Management is a leading independent, nationally recognized, fee-only firm serving clients for over 30 years. As a trusted advisor, Savant Wealth Management offers investment management, financial planning, retirement plan and family office services to financially established individuals and institutions. Savant also offers corporate accounting, tax preparation, payroll and consulting through its affiliate, Savant Tax & Consulting.

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