While markets seem to be on the rise and a recovery imminent, lay-offs are still happening - in fact, the New York Times is reporting that, thanks to general feelings of malaise and uncertainly at the top, budget and personnel cuts are on the horizon for some of the nation's largest companies. Unfortunately, down-sizings like this can have a trickle-down effect, so you may see your job security wavering once again.
If, heaven forbid, your position does more than waver and you find yourself packing up your cube or office, don't let money be the first thing you think about. In fact, before your even start to contemplate your finances, take a breath and keep a cool head - this needs to be a no-panic zone. If necessary, take a day to get your head around what's just happened. But only a day. Otherwise, you're losing precious time that you could be using to do something positive, productive, or proactive.
Once you've taken a 24-hour breather, start thinking about your next moves. Financially, here are four factors to consider:
Cut all unnecessary spending. Getting laid off is depressing. You know what I do when I get depressed? I love to shop. But hold off on the retail therapy, because even if you're getting a severance package, you need to save every single dime that doesn't go towards essential bills. Right now, your immediate fiscal future is a bit uncertain, so keeping the greatest amount possible in the bank is your biggest money-related priority.
Apply for unemployment. Go to your state's employment commission website and apply for unemployment immediately. It may only be a fraction of your previous income, but hopefully it will be enough to get you by.
Look at your insurance coverage. Your severance docs will tell you how long your health insurance will remain in effect. Try to get a least one extra refill of all covered medications, any contacts or glasses you may need, and get in for any yearly or other required appointments before your insurance runs out. Chances are, independent health insurance probably won't have the same coverage that your current policy does, so this is just a matter of thinking ahead.
Think about your 401(k). If you've taken out any loans against your company's 401(k), you'll need to figure out how to repay them quickly. If not, you'll need to decide: cash out your account and pay a 20% fee, or roll over your current 401(k) into a traditional IRA. Choose the option that best suits your situation and act quickly.