Your employer [ENTER NAME HERE] just announced a major cost savings initiative (code for layoffs) because the results expected from various strategic initiatives haven’t panned out.  Se pusieron los huevos a peseta! They’ve been playing catch-up for several years in THE growing category. They’re making multiple small bets to set the enterprise up for the long-term.  But, ni de piña, ni de coco! They’ve been distracting you with townhall meetings! The CEO is touting their latest plans. Transformation teams are advancing diversity and inclusion pie in the sky goals and objectives. Maybe they’re adding a new wing to their building to bring everyone together. 

Meanwhile, they got their minions in a dungeon crunching numbers on the next acquisition target; no disrespect to you if you’re one of them.  While there’s no good time to hear about a layoff, they have a knack for picking the worst time of the year. They announce big transformation plans and feed you stories of transparency! But ‘we’re gonna have to let some of you go’.  As the pecking order goes, your boss knows your fate way in advance but must play it cool. In fairness to the pecking order, his boss knows your boss’s fate too.

Some companies treat their employees well even when they let them go while others just suck at it. There’s always a group of people that these announcements come “como anillo al dedo” (literal translation – like a ring to a finger). For the rest, well, it mostly sucks unless you had already been working on Plan B.  It’s really got to suck for the HR folks who are building the organizational charts and realize that there’s no box with their name on it. Hopefully, that’s not you!

So, the day comes when your boss calls you into his office and gives it to you… “Pedro, after evaluating the needs of the group, I’m letting you go… Your last day is Septober 32nd.Se jodió la bicicleta!  This might be a great time to consider several things:

Cash Flow And Your Financial Situation

If you’re not clear where you stand with all your monthly obligations, now’s the time to get to it! Dust off your Budget Tracker or start developing one. Similarly, it will be helpful to make a list of all your Assets and Liabilities. Get a financial picture of big-ticket items you own, what you owe on them and who you are making that monthly payment to.  Regardless of the length of your severance, now’s the time to think about how your cash flow might be impacted. Think about the worst possible scenario if you’re unable to land a job with the same, or better, salary!

Your Mortgage

consider refinancing your mortgage to lower your total monthly payment! But you should start the process WHILE YOU’RE EMPLOYED because the mortgage company is going to require verification of employment, capisci?!?! You can pay down a 30-year mortgage in 15 years, but you can’t pay a 15-year mortgage in 30 years. Consider whether it makes sense to refinance your home to lower the monthly mortgage payment.  Mortgage interest rates are still quite low even for a 30-year mortgage.

Student Loans

If you have multiple student loans, consolidation might be a way to lower your monthly payment as you extend the time to pay them. It will likely cost you more in the long-run because of interest, but it’s something worth looking into. Sofi, Commonbond and CollegeAve are a few of the players in this area.

Credit Cards

Credit cards can be a double-edged sword. They can be a great tool when managed properly and paying your balance in full every month. Once you start carrying a balance, it can spiral into that hamster wheel of hell feeling where you pay but the balance stays the same or even goes up.  If you’re carrying a big credit card balance at 15% interest, a few options to consider are: 1) a zero percent credit card balance transfer offer that gives you 18 months to pay at no interest, 2) rolling that debt into your mortgage should you choose to refinance, or 3) a personal loan at a lower rate than you’re currently paying.

Check out the post on tips to Keep More of Your Money.

Embrace The Hustle

Opportunities abound in this interconnected world and this could be a great time to start something new.  Take Blockchain, for example. The Hyperledger technology is shaping up to be the latest transformational innovation. You could become a Certified Hyperledger Expert.  Check out several Side-Hustle ideas to make more money.

That’s it for now.