Laid Off in 3 Months: My Financial Checklist Before Unemployment

With Liberation Day tariffs already putting the U.S. economy on the ropes, questions linger as to just how bad things can get and whether a recovery will be possible if Trump doesn’t back down from a trade war that’s looking like a massive lose-lose for all sides. With the U.S. slapping a disturbingly high 104% tariff on Chinese goods as it aims to “fight to the end,” it seems like the post-Liberation Day crash still has a ways to go. As firms furlough and lay off workers at the hands of steep tariffs, the first wave of American workers stands to be knocked down.

While it can be tough to avoid a devastating blow at the hands of external factors, there are ways to ensure one’s in good enough shape to get back up after they’ve taken a fall. In this piece, we’ll check in on a Reddit user who has a financial checklist they’re going through as they prepare for a layoff and an ensuing job search. With a recession now likelier than not, according to many big banks following Liberation Day tariffs, it’s vital to keep one’s chin up despite the profound feeling of discouragement when it’s radio silence after applying for dozens of positions.

In any case, not everyone will be given three months’ notice that they’re about to be on the receiving end of a layoff. Many workers get thrown a curveball out of left field with little to no time to react. Either way, if you’ve got time to prepare, going through a checklist could help smoothen things out as you return to job-hunt mode.

This Reddit user is going over a checklist to ready for a looming layoff. It’s a solid game plan.

The Reddit user has a pretty sound pre-layoff checklist that will save them considerable sums once their three-month tenure is over.

First up, they’re maxing out their retirement contributions, which is a wise move to ensure they’re getting the most from their remaining employee match. Indeed, you may as well get as much “free money” as you can by contributing an amount to maximize your 401(k) employer match. It’s a smart move that also stands to chip away at the year’s tax burden a bit.

Second, they’re looking to get as much as they can out of their benefits before their coverage has a chance to expire. Indeed, dental, vision, and medical coverage can save many thousands per year. And if one is overdue for a dental cleaning or a new pair of glasses, it’s about time to put the benefits to work before they’re gone.

Of course, many benefits plans don’t expire immediately upon layoff. Some plans extend for some months after. Either way, getting the most out of the remaining benefits sooner rather than later is only prudent. 

Third, the Reddit user plans to stash away their six weeks’ severance alongside an emergency fund that should sustain another year. The fatter the emergency fund, the better, especially given the likelihood that Trump tariffs will cause everything to rocket higher in price. The good news is the Reddit user is also slashing expenses (think streaming and other non-necessary services) to live a more “bare bones” frugal type of lifestyle.

Finally, and perhaps most importantly, the Reddit user has kicked off their job search early. Aside from applying like crazy, doubling down on networking (reaching out to laid-off colleagues) could pay off dividends in the form of a future reference or referral. If all goes well, they may have a position waiting for them before they’re officially laid off the job. Of course, there’s a high risk that three months won’t be enough to find new employment. Either way, the hefty emergency fund and more frugal lifestyle are in place to (hopefully) orchestrate a soft landing. 

The bottom line

Layoffs and furloughs can be quite traumatic to live through. But by having a checklist and game plan, one will improve their chances of bouncing back and landing new, perhaps better work.

The post Laid Off in 3 Months: My Financial Checklist Before Unemployment appeared first on 24/7 Wall St..