A layoff can throw your finances into chaos. But with a clear plan, you can stretch your runway and reduce financial stress during your job search.

Step 1: Know Your Runway

First, calculate exactly how long your money will last:

1. Add up all your savings, severance, and expected unemployment benefits
2. List your monthly expenses (be honest)
3. Divide total resources by monthly expenses = your runway

Use our Financial Runway Calculator to get your exact number.

Step 2: Prioritize Your Bills

Not all bills are created equal. Here's how to prioritize:

Priority 1: Must Pay

• Rent/Mortgage
• Utilities (electricity, water, heat)
• Health insurance
• Car payment (if needed for work)
• Food

Priority 2: Important

• Phone/Internet (needed for job search)
• Minimum credit card payments
• Insurance premiums

Priority 3: Can Defer

• Subscriptions (streaming, gym, etc.)
• Extra loan payments
• Non-essential purchases

Step 3: Cut Expenses Quickly

In the first week after a layoff, consider:

• Cancel or pause subscriptions ($50-200/month saved)
• Reduce dining out and food delivery
• Pause gym membership
• Negotiate bills (internet, phone, insurance)
• Consider pausing retirement contributions temporarily

Step 4: Negotiate with Creditors

Many companies have hardship programs. Call before you miss payments:

• Credit cards: Ask for reduced interest rates or hardship plans
• Student loans: Apply for income-based repayment or deferment
• Mortgage: Ask about forbearance options
• Utilities: Many have assistance programs for unemployed

Step 5: Create Emergency Income

Consider ways to bring in income during your search:

• Freelancing or consulting in your field
• Gig work (DoorDash, Uber, Instacart)
• Selling unused items
• Part-time work (can often be done alongside job search)

Common Financial Mistakes to Avoid

• Dipping into retirement accounts (heavy penalties)
• Taking on new debt
• Ignoring bills until they go to collections
• Not filing for unemployment immediately
• Being too proud to cut back