Managing Through a Layoff: Financial and Emotional Strategies
by Wendy Wright, LMFT, Financial Therapist, Wealth Transfer Dynamics Specialist, Money Coach
In today’s uncertain economic climate, layoffs have become an unfortunate reality for many professionals. Whether you’re currently facing unemployment or concerned about job security, navigating a layoff requires both a financial plan and an emotional plan. I am here as your Financial Therapist and Money Mentor resource to talk through an holistic approach to managing this challenging life crisis.
Emotions are Real
A layoff is more than just a financial event—it’s an emotional one that can shake your identity and sense of security.
“When someone experiences a layoff, they’re often dealing with a complex mix of emotions including shock, grief, anger, and fear. Getting real about these feelings is a key first step toward healing and moving forward.” – Wendy Wright
Many professionals report that the emotional toll of a layoff equals or exceeds the financial stress. If you are in the midst of your own layoff experience, you know this to be true. The emotions are normal and expected. Your career, your job, often represents years of hard work, sacrifice, and personal identity. Losing that connection can trigger a grief response similar to other significant losses.
How to Get Real with Your Emotions
The first step in managing layoff-related emotions is simply acknowledging them. I recommend these approaches:
- Allow yourself to feel without judgment. Emotions aren’t “good” or “bad”—they’re information.
- Remember that emotions, even very strong ones, will last a few minutes to an hour. This means they don’t last forever, even if they feel like they will as you experience them.
- Maintain a journal to track emotional patterns and identify specific triggers.
- Talk through your experience with trusted friends, family members, or a therapist.
- Recognize that grief isn’t linear—you may cycle through different emotions over time.
Suppressing emotions often leads to them surfacing in unexpected ways. By acknowledging your feelings, letting them flow through you, you can reconnect to some control over how they affect your daily life and decision-making.
Financial Strategies Before and During a Layoff
Having a money plan can significantly reduce stress during periods of unemployment. One of my 10 Principles of Financial Therapy© includes:
“A plan is only as good as it’s adjustment process”
This is the time to apply your adjustment process. This includes these strategies.
1. Know your “basics and obligations” number
You have likely heard over and over to “build an emergency fund covering 3-6 months of essential expenses”. How do you feel when you hear this? Maybe stressed, shamed, frustrated, thinking “that is great for everyone else but I can’t do it”. Many of my clients struggle to put money aside. This is connected to many deeper issues of decision making struggles, not feeling comfortable caring for your deeper self and feeling pulled to take care of everyone else first. Judging yourself doesn’t help make this happen.
When a layoff is on the horizon or has already occurred, it’s the time to look at your current numbers. Let’s start with remembering and applying Principle 1 “approach money with abundant, compassionate curiosity and zero judgment”. This is key to getting close to your numbers at this deeply emotional time. Using this principle, review and identify your current day to day life spending. List out the “basics and obligations” and get to know this number. The “basics and obligations” number aligns with the foundations in Maslow’s hierarchy of needs. It includes expenses such as those to cover shelter, food, clothing, transportation, safety, insurances, and your required/minimum payments on debts.
2. Approach the Adjusting
Once you have your “basics and obligations” number, spend time with your expenses and make a guide for adjustments.
During financial uncertainty, we want to focus on as few numbers as possible. When you are in a time of stress your mind can often feel flooded with emotions, and this impacts your decision making process. Having just a few key numbers to focus on can provide some relief. Yes, you will be shifting your spending down during this time, which is also emotional. You can remind yourself that this isn’t about permanent deprivation but strategic adjustment during a transitional period.
3. Leverage Available Resources
Many professionals leave valuable resources untapped during layoffs. It is ok to consider, without judgment, resources outside of income. These can include:
- Applying for unemployment benefits immediately—don’t wait.
- Contact creditors proactively to discuss hardship programs or payment modifications, such as mortgage forbearance.
- Review your employer’s severance package thoroughly. Remember negotiating terms is totally possible.
- Investigate healthcare continuation options, such as COBRA alternatives.
There are resources specifically for these situations. Utilizing them isn’t a sign of weakness but of financial intelligence. Again, approach these resource decisions with “compassionate curiosity and zero judgment”.
Emotional Management During Job Interviews
The job search process following a layoff presents its own emotional challenges, particularly during interviews where anxiety can impact performance. You may be noticing strong “all or nothing” thought patterns popping up, they often do when we are stressed or fearful.
Managing Pre-Interview Anxiety
Let’s look at these techniques for managing pre-interview nerves:
- Practice grounding exercises before interviews—focus on your breathing or physical sensations to center yourself.
- Remember why you would hire you. This can help you list out what you bring to the table, why you are a good candidate for a new job.
- Prepare concise, confident responses about your layoff experience that focus on moving forward.
- Practice mock interviews with a trusted colleague to build confidence. Hearing yourself out loud in these practice moments can really boost your brain’s ability to stay calm during an interview.
Interviews after a layoff often trigger impostor syndrome or feelings of inadequacy. Recognizing these as normal reactions rather than reflections of your actual abilities is crucial.
Reframing the Layoff Narrative
How you frame your layoff experience significantly impacts how potential employers perceive it. You can write out a brief, matter-of-fact explanation that:
- Acknowledges the layoff without apologizing for it
- Highlights what you learned or skills you developed afterward
- Pivots to enthusiasm about the opportunity at hand
Your narrative about the layoff becomes others’ perception of it. Then practice it out loud. You will build a comfort with talking about this experience while keeping the focus on your value and future contributions.
The Path Forward
A layoff, while challenging, often becomes a catalyst for meaningful career and personal growth. Many later share that this unexpected transition eventually led to more fulfilling work, better work-life balance, or the courage to pursue long-held dreams.
The space between what was and what will be is where transformation happens. It is so hard to see this in the moments of working through the loss.
Whether you feel a layoff is possibly in your future, or has already happened, I recommend continually asking yourself “what do I want” in your job life. Use the talk of layoffs as a reminder you have agency. This can look like regularly exploring job postings and keeping your resume/linkedin profile up to date. This includes chats with your network about opportunities and ideas. A layoff is challenging in it’s energy of happening “to you”, and this dampens your sense of agency in your life and money. Use these reminders and strategies to endorse your sense of agency in your life, your money, and your story. Check out my resources at wendywrightfinancialtherapy.com, especially the Financial Therapy Journal. For more individual support, book a Discovery Call and see if some Money Mentoring sessions are right for you.
As a reminder, these resources are not therapy or a replacement for therapy. They are meant to be educational and great to use in combination with therapy. To book a free discovery call with me, click here!
