Laid Off? Now what do you do?

You have been laid off. You may have known it was coming or you may have been caught off guard, but here you are. The alarm clock just went off and you've opened your eyes. It's not the weekend, it's not a holiday, you aren't on vacation, but you have nowhere to go.

What's your first thought? I hope it's not "I need a job", because that is absolutely wrong.

What you need is food, water and shelter. A job is one way to provide those things, but jobs are scarce right now. It is an unfortunate truth that you might not be able to find new employment right away. If you are older, you might never be able to find another job, or at least not one that pays enough to support your current standing of living.

I don't want to depress you, but lowered expectations might be true for anyone of any age. Many employers are playing hardball right now, demanding more and offering less. If your budget says you need more income than what the current job market is likely to offer, a job doesn't answer your problems, does it?

Again, it's food, shelter, water. Well, that and the cable bill, and the hair stylist. Oh, and the payments on the summer place. There's that dinner with the Smith's coming up next month and it is your turn to pay. You know, we are almost out of caviar, too. 

Caviar?

Yeah, maybe you could give up the caviar, but there are probably a lot of things you wouldn't want to give up, right? Whatever your life style is, you are unlikely to think that downgrading it is an attractive option.

Yet, that is one of the things you should be thinking about.

It's too soon for that

No, really, it isn't. Actually, this is something that you should always have in mind, even when things are going well. Think of it as your contingency plan: how much could you reasonably give up if you really had to?

That can be a sobering analysis. It's the old limbo dance: how low can you go? What are you able to give up and what would you be willing to give up if you had to? The results can be depressing, because trimming the frills may not yield enough to match your current economic situation.

Yeah, but I'll find a job soon

There you go again, thinking about a job. I know, you really can't help it. Most of us have been conditioned all our lives to "have a job". If you are introduced to someone you don't know, the conversation probably doesn't go very far before someone asks "So what do you do?". If the answer doesn't imply gainful employment, that can actually stop the conversation dead in its tracks with at least an awkward moment. You are supposed to have a job. You are expected to have a job. You NEED to have a job.

But again, you don't. You need food, shelter and the cable bill. Yes, and the 'vette. That's an investment. Nobody expects you to give up that - not yet, anyway.

Running the numbers

By the way, let me just take a second to plug Mint.com here. I have no motive for doing this - they don't give me anything if you sign up. I just honestly like what they do, which is to track your spending. Check 'em out, go read some reviews and decide if it's for you.

Assuming you haven't been using Mint or some other tool to track your expenses, it's time to look at the numbers. What do you need and what do you have, The gozintas and the gozoutas.

Did you get a severance package? Lucky you. How long will it last if you keep spending in the wasteful way you have lived up til now? How long if you cut back on the non-essentials?

Hmm. A whole two weeks longer by cutting back? I think you need to try harder.

Tough decisions

I know, you don't want to think about the really hard stuff right now. Dropping Cinemax, sure, you can do that. But selling the house or the even the vacation place? That's not something you want to think about now - it's too early!

Well, consider this. You don't want to be thinking about that kind of stuff when you are under the gun, either. You'll be stressed enough when the severance runs out, when unemployment benefits have petered out and your hard earned savings are a sad memory. That's no time to be making big, stressful decisions.

You need to plan for the worst NOW, If push comes to shove, where are you going to live? Is that summer place an option? Relatives? An apartment? A less expensive town? A less expensive country, even?

Thinking about these things doesn't mean you will have to do them. It just means that you will have some ideas of what you might be able to do if you have to. If you are a couple, you've both talked it all out, you know what you agree on. You thought living on the beach in Mexico was an option, but your life partner doesn't quite see it that way.

Defeatist

Does that sound like a defeatist attitude to you? It really isn't, it's just having reality firmly in mind. We're going to leave all that behind in a minute and work on keeping Cinemax, the trip to Aruba in February and whatever else is in your current budget. It's just that reality doesn't always match our goals, so we need to have those contingency plans. Just in case. Humor me.

I'm not going to just lie down and die!

Good for you. I agree with you 100%. When faced with a disparity between what's coming in and what's going out, my first thought is always to increase what's coming in.

Oh, sure, it's always worth looking for places to save money. My wife and I do that automatically but I am also always looking for ways to increase my income. That should be just part of your life, employed or unemployed, but when you are unemployed, you need to focus more sharply.

Walmart is hiring

A little menial or part time job could add to your income right now. It could mean the difference between giving up some things you really don't want to give up and not.

However, it can also be a bad idea.

If you are tied up as a Walmart greeter, you won't be available for other opportunities that might come along. The job may sap your energy, making it harder for you to be enthusiastic about those opportunities.

It might well be necessary, but you need to be aware of the downsides and decide if that small amount of money is worth it.

Opportunities? You mean job interviews, right?

No, I don't.

Sure, a job interview is an opportunity, but it's not the only thing. Remember, your real goal is reconciling your budget. Identifying something you can trim is an opportunity. Getting stuff for free is an opportunity - think food stamps and other social programs you might qualify for. A little side work is an opportunity - whether it is doing a little consulting for your old employer or doing some yard work for a neighbor.

Your task is that budget - both sides of it.

A wrong opportunity

Oh, fantastic. You found a job! It pays enough - oh, maybe you need to trim Cinemax, but you won't have to give up Aruba!

There is a lot of travel, though. That's not really your thing, but hey, it's a job, right? In these times you have to take what you can get!

Well, maybe. But you could be running a risk here. If you end up really hating this work, or worse, do it badly enough that you get laid off again, where are you? Explaining getting laid off once is easy - the company was downsizing, it had nothing to do with you. But twice? Oops, that isn't going to look good on your resume, is it?

Think about that carefully.

Can you retire?

You may be too young for this to be an option, but if not, it is something you should seriously consider. You don't necessarily have to fully retire; if you are 62 in the U.S., you can draw partial Social Security benefits to help balance that budget.

If you aren't quite there yet, this may still be a good time to think about early retirement. It doesn't necessarily take millions of dollars to drop out of the rat race. It does take planning and maybe giving up Cinemax. Or Aruba.  But maybe neither of those.

Me, Inc.

I am a big fan of working for yourself. I know, you think that having a job gives you security. It doesn't, really, and I would have thought that getting laid off might have made you see that. Real security comes from having a hundred "jobs" or a thousand or ten thousand. When you work for yourself, you might lose a customer or two, but it would be extremely unusual for you to lose everything at once. Even in bad economic times, you'll probably still make some money. Contrast that with being laid off.

Right now, with no job, self employment is a great option. Because you'll set your schedule, it shouldn't interfere with opportunities like job interviews - assuming you still want to pursue that option after considering what you might have to put up with to get back into the corporate hierarchy.

Who knows? Your stab at being an entrepreneur might work out very well. It could be the best thing you ever did, the golden path to happiness. Really, you should look at being laid off as an opportunity to explore this. If it's something that you can do out of your house and will not need a big investment to get started, this really is an ideal time, isn't it? You have spare time and plenty of motivation from that budget, right? So why not?

So what are you going to do today?

What, you aren't out of bed yet? Time to get going. You have plenty to do to keep you busy today, so let's get going. Attack that budget, think about contingencies and seriously consider working for yourself.

A job may not be the answer at all, but even if it is, you have planning to do. Get to it!

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