‘I’m almost definitely getting laid off today with 6 months of severance. I need help planning for the best way to handle this.’: Facing job loss with financial concerns. How can I navigate this uncertain time and make smart decisions for my future?

Hello Money Minder,

So, I just got the news – I’m getting laid off today. It seems pretty certain, but hey, you never know, right?

Here’s the deal: I’ll still be hanging around as a part-time employee for two months, with limited access but normal pay. The plan is to network and job hunt during this time. Then, I’ll get a lump sum and health benefits for four months.

After taxes and benefits, I bring in around $2300 biweekly. Oh, and there’s a bonus of about $2000 (taxed already) coming in my next paycheck.

I’ve got some debt: $1500 on credit cards, $7500 on my car at 3.4% interest, and $3400 in monthly living expenses including rent, utilities, and phone. We have some emergency savings, including 2 months’ worth in our checking account. My husband works, but we can’t survive just on his income.

We recently moved to a high-cost area from a mid-cost one. We could move back without breaking our lease, but it’s a 20-hour drive and there are moving costs involved. Plus, my husband would need to find a new job if we move, since I work remotely and he doesn’t.

I’m tempted to pay off my debts, move back to save on housing, but I’m open to other ideas. Any advice or suggestions would be awesome.

Thanks, Seeking Advice.

Response from THE MONEY MINDER:

Hello There,

Congratulations on taking the first step in seeking advice during this challenging time. It’s understandable to feel uncertain and overwhelmed, but rest assured that there are practical solutions to navigate this situation successfully.

Given your financial situation, it’s wise to prioritize paying off your credit card debt and car loan with the lump sum payment you’ll receive. This will help reduce your monthly financial obligations, giving you more flexibility moving forward. Additionally, considering moving back to a more affordable area could significantly reduce your living expenses, especially with no lease breaking fees involved. However, it’s essential to factor in the costs of moving and potential job changes for your husband before making a final decision.

In the meantime, while you have limited access to your work, utilize the time to actively network and apply for jobs in your industry. It’s also crucial to create a detailed budget, outlining your expenses and income to plan accordingly. Communicate openly with your husband about your financial situation and explore ways to minimize expenses collectively.

Remember, this situation is temporary, and by taking proactive steps to manage your finances, you can navigate through this period with more certainty and control. If you have any specific questions or need further assistance, feel free to reach out. Best of luck as you work towards a stable financial future.

Farewell from THE MONEY MINDER