The Financial Choice That's Most Important When You've Been Laid Off

Yesterday, a friend shared that she was laid off this week.

Three weeks ago, the Wall Street Journal laid off approximately 100 staff – many of whom were personal finance journalists. Hmm…

Recently, Microsoft announced it was laying off 7,800 additional (!) jobs.

Layoffs are typically associated with tough economic times. But, our economy is steady! Even with this week’s weird concatenation of events (Greece’s debt crisis, China’s market meldown, and the NYSE’s three hour tech-outage), the U.S economy continues to grow – albeit slowly. And the “market” as measured by these key indices – Dow Jones Industrial Average; S&P 500; and Nasdaq – rallied to end the week in positive territory and not too far from their 52-week high.

The reasons for the layoffs are as varied as the firms conducting them. For some, it is purely expense containment and reduction; for others, it is triggered by a needed shift in the company’s business and business model. Regardless of the reason, there is a person and family emotionally and financially affected by this decision to reduce staff.

There is a person who now needs to work on plan B for their career and mostly likely their personal finances, too.

Is this you? Have you recently been laid off?

If so, you may feel tentative, anxious, short on confidence and may be even a little guilty. If this is a repeat layoff, the emotional scar of multiple layoffs may run deep. And you might be freaking out, mad that you have to start over (again) and wondering, “How am I going to bounce-back this time?” or “When will I ever catch up to where I once was?”

Given these likely sentiments, what I’m about to suggest may seem really far-fetched: Whether you received a severance or not, don’t look at what you currently have in your checking, savings, and investments accounts as “this is all I have.”

Thinking this way will only add to your angst. Your body will tighten up; your creativity will be restrained; your vision or scope of sight will be limited. In other words, the senses you need the most right now aren’t operating at full capacity.

When you think that what you currently have is all you’ll have, you increase your chances of being short-sided and making mistakes – professionally and financially – you’ll later regret.

Layoffs can be traumatic, especially when your household is reliant on your income. And when your life has been upended, it’s natural to clam up and shut down. But during this period of transition, managing your mindset is critical.

So, yes, give yourself permission to grieve the loss of your job. But that’s not a hall pass to wallow indefinitely. Wallowing won’t help you avoid or get out of a financial slump.

When life forces you to reinvent your career, you’ll likely need to recalibrate your personal finances, too.

And the most important choice you can make right now is to believe that what you currently have isn’t all you’ll have, but that is the springboard for more!

 

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