Rich Girl Roundup: How to Prep For Layoffs

Katie: Welcome back, Rich Girls and Boys, to the Rich Girl Roundup weekly discussion of The Money with Katie Show. I'm your host, Katie Gatti Tassin. And today Henah and I are talking about the reality of layoffs. The tech and media sectors have been hit especially hard, this go-round. Before we dive in, here's a quick message from our sponsors. 

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Katie: All right, before we get into this week's topic, I just wanted to tell y'all about next week's podcast episode. So I wrote it over Christmas break, quote unquote “Christmas break.” Even though we're in the working world now, it'll always be that in my mind. And it was kind of inspired by this annual review process I did, and it just unlocked this super powerful shift in how I was kind of scheduling my day and structuring my week, and we get a little bit into goal stacking. So it's gonna be a super tactical and actionable episode. I think y'all are gonna love it. So that's next Wednesday. I will give you a little teaser by saying that one of the takeaways that I had for my goals moving forward for 2023 and the way that I've approached it has actually led to me reading…let's see, it's like late February right now. I've already read 13 books in 2023, and I credit this system with helping me do it. So I think there's huge financial implications, and I think y'all are gonna love next week's episode on Wednesday. So keep an eye out. 

Henah: So Katie, how are you doing? 

Katie: I'm good.

Henah: Okay, well, that was boring. I'll head right into the question, which is, it is no secret that we're in the midst of a lot of economic uncertainty, and we've gotten a few questions on what to do if you've been laid off, or you think it's something that could happen. And so one such question that we got from a listener named Morgan is, “In prepping and coping for recession, should we stay the course with saving and investing, or focus more on saving in the case of layoffs, or is there some other alternative?” 

And so given our respective industries, my husband and I have actually gone through this three times now, and I wouldn't say it's because we're bad at our jobs, but it's just kind of a common occurrence in the specific industries we're in. And Katie, you've talked, too, about how to prepare for losing your job, which we’ll link in the show notes. But I would love to have you kind of start with what's the 101 on what you should do. 

Katie: Ah, you're gonna kick this can to me. Okay. Financially… 

Henah: I am. So that I can't get sued if this is wrong. Just kidding. 

Katie: Well, getting laid off is obviously very stressful. It's a very disruptive life event. When we're talking about the financial doomsday prep that you wanna think about, I have a few different kind of pillars of the layoff plan, which is figuring out what cash you have on hand readily available to you. So doing a little inventory, and obviously if you have brokerage accounts or liquid investment accounts, we'll call them, that will work. But we definitely wanna get a sense for actual cash that could be withdrawn imminently if you needed it, just to know. And then using that to calculate your current runway, like how much life does that cash translate to? Because then you kind of have a sense for, okay, what would my situation look like? Am I in a position where if I were to lose my income tomorrow, I'd be cool for a few months? Is it that I actually wouldn't even be able to pay rent next month? What is the situation? Because you always wanna…cash is king when you're in a situation like that. 

Then I think, if it were to get to the point where you were pretty confident that something might be coming, obviously you're probably also doing job searching and things of that nature. And Henah, I know you'll talk about some of the other elements, but just purely financially, I think at that point you kind of start to try to pre-identify costs that you could cut to lengthen that runway to buy more life. 

Henah: Yeah.

Katie: So like any high-ticket discretionary expenses that you could begin to either cut back on now, so that you're starting to pad that savings cushion, or that you know, if you had to, you could nix them and you could get a little bit more time out of that cash cushion. And then I think the final thing is just examining your liabilities and shoring up any liabilities that are stretching you thin. So maybe you just bought two new cars, or that's an extreme example, but if you have anything where it feels like a liability that you could probably actually offload if you were thinking, “Okay, my industry was hit really hard; it might actually be kind of difficult for me to find similarly paid employment for a while, and it's not gonna happen quickly, and I have a lot of liabilities right now.” I think it's also important to be, like “What could I sell or what could I offload in the short term that is not really necessary, but again would just buy me more time?” 

And then, I hate this one, but determine if you need to get health insurance. Do a little shopping around if you're not gonna be covered by a spouse's plan, and if that is something that you are going to need if you were to lose your job. I think it is worthwhile just to feel kind of prepped and to know what you're getting yourself into if it comes to that. What is it gonna cost every month to pay for just catastrophic, high-deductible health insurance? 

Henah: That's kind of the number one thing that, outside of shelter and food, that's a nonnegotiable for me. The three times we've been through it, it has been like, what is the health insurance that we're gonna get immediately so we are covered? Mostly 'cause I believe that luck in my life likes to throw it in there, like a little injury, when it's the worst time. 

Katie: Kick you when you're down. 

Henah: Yeah, literally. That's a great point. I would say the other kind of nuance that a lot of people don't always know is that you want to apply for unemployment right away, because it takes up to eight weeks just to get that first check. And for example, when my husband just went through it, he literally started a new job the week that he got his first check. So there was a huge gap where we weren't having any income and we were really living off of our savings. And then of course the first week's paycheck or whatever came in. They'll pay you up for the amount of time that you're out of work. So he got six weeks or eight weeks or whatever in a lump sum later. But you at least wanna put the request in right away, because they usually have to do a vetting process. They wanna see that you're actually actively applying to new jobs. It's not just a one and done, which I think some people don't realize. 

And when I went through it as well in New York, I had to go in every week to prove that I was searching for jobs. I had to attend job seminars. So there's a lot of moving pieces. 

Katie: Do you think it's worth it? 

Henah: I think it depends on your situation. Like supplementally, so California was more generous than New Jersey and New York were with the unemployment checks, and it was enough that it was able to at least get by on the bare bones of having some income. It obviously wasn't enough that we had a ton lying around, but it was substantial. 

Katie: So it's worthwhile with the kind of bureaucratic headache? You'd still say definitely still do it? 

Henah: Yeah. I mean if it's, obviously it doesn't apply if you quit your own job, but if you've been fired, I don't see why you wouldn't wanna at least try. And then if you feel like it's too much, you don't have to follow through. But at least signing up and going through that first round I think, is worthwhile. 

And then the other piece is to remember the rights that you have as an employee. So you don't wanna feel pressured to sign an NDA in exchange for a severance, or go through the process and just kind of like sign paperwork without checking what you're signing off for. Because one thing also that people don't know is that severance can be negotiable. So that is worth having the conversation with the employer or saying, “You know, I don't really feel comfortable with these conditions. I don't wanna not be able to talk about this, so I'm gonna turn down the severance if you're in that position.” Or “I actually have been here for 12 years and I think it would make more sense if I got a little bit more,” like whatever. And so that's something else to consider, too. 

Katie: Yeah, I like that. 

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Katie: So obviously if you think that you're in a position where you might be about to be without work, you're not gonna be feeling great, most likely, like you're not gonna be in your most energized, creative, and operating from a place of security mental state. But I do think that sometimes it's worth thinking about how there is the other side of the coin here, that to every bad event there is usually some door that opens as a result, and that it can be, in some cases, a redirection opportunity. And sometimes we don't realize how badly we need to change until a decision like that is made for us.

I've had a couple friends that have been in this scenario, where they weren't super happy but the pay was good, and they were considering doing something else. That's not to discount the pain of such an experience or the emotional and financial stress of going through it. But I do know a couple entrepreneurs personally who, their businesses were born in the wake of a layoff, out of necessity and opportunity that did not exist before. So I think that as negative and as scary as it can be, I don't wanna neglect to be like, “But there is hope!” And there are, this can actually work out better for you, even if it feels in the moment like all is lost. 

Henah: And that's on toxic positivity. No, I'm just kidding. There's also the other side of it, right? Which is that we know that companies are raking in record profits. So I think it's also okay to be really critical and angry and upset with saying that they need to do layoffs, or that… 

Katie: Oh, for sure. 

Henah: Obviously I'm not saying that you shouldn't feel one or the other way, but the other thing I wanna talk about, kind of piggybacking off of that, is the psychological impact, as well, of getting laid off. And it's something that to this day, my husband and I talk about all the time. And when I got laid off from one job, I went to therapy for a year after that to just kind of get over the PTSD of that situation. And so I wanna say that there's no shame in seeking help or in getting laid off in the first place. It's usually not very personal. It's not like “You, Katie, are the person that we wanna get rid of.” 

And also that there's really no judgment in doing what you need to do, whether that's moving back home, or taking part-time work, or putting it out there on LinkedIn. I know that there's a lot of taboo about talking about it publicly, but I don't think that there should be. Because you also don't know where your next opportunity could come from. 

Katie: Exactly. 

Henah: And to your point, it could be like the stepping stone you needed to get to something that you're excited about and loving and makes more money than before. 

Katie: Yeah, absolutely. I definitely, to your joke about toxic positivity, I never wanna make it sound like, “Oh, it's so easy, just go do something...” No, not at all. This is obviously like a very scary thing. Nobody wants this to happen. I remember during the pandemic when I worked for an airline, there was talks of furloughs. Because the airlines basically overnight became completely unprofitable and had like eight weeks of cash. And so it was like, ooh, okay, the writing's on the wall here, even if I have a job in the next month. I know that they'll probably take years to recover from this. 

And I remember calling my dad, freaking out and saying, “Hey, if I lose my job and everything goes to crap, can I move back in? If it came to that, could I pay to live in the basement?” And he was like, “Yeah, of course you could.” Which obviously, there's privilege in having parents that are willing to let you move home, for sure. But I don't know, for me personally, even just knowing that it could happen, getting my ducks in a row ahead of time while I still had the job made me feel so much less stressed about it. 'Cause I was like, well, now I have a game plan. If the worst happens, I'm gonna do this with the money. I'm gonna potentially move out of this apartment and go somewhere else, or I'm gonna have this person move in. Just having a plan made such a difference in my psychological state during that time where we didn't know day to day. 

Henah: I have a question for you. So do you think that, obviously we wanna operate from an abundance mindset for money and our goals, but do you think that there's a benefit here in operating from a scarcity mindset if you think this is coming?

Katie: For sure. I honestly think…ohhh, man, to open the abundance versus scarcity can of worms, I think you have to apply them selectively. I think you have to apply an abundance mindset from an opportunity standpoint. Like, “There's always more opportunity out there for me. There's always more…” You gotta be playing offense, right? And that requires believing that it's possible. But I think financially, actually operating from a scarcity mindset and thinking “All of this could disappear at any moment” can keep you on your toes playing defense in the ways that will protect your downside and will protect you from making foolish decisions. So I think in a layoff scenario, kind of “hoping for the best, expecting the worst” makes a lot of sense to me personally, for my personality type.

Henah: So my scarcity mindset is good. I'm gonna weather anything. 

Katie: Yeah, this is why you're gonna be very successful. Paranoia, right? Constructive paranoia. 

Henah: Constructive paranoia. Yeah. 

Katie: Using it to fuel you instead of give you that analysis paralysis of like, “Oh, I don't know what to do next.” It's like, how can you constructively harness that anxiety to propel you in a productive direction? And that's on toxic productivity. This has been Toxicity with Katie during layoffs. Just kidding.

Henah: I don't disagree that seeing things as opportunities and welcoming opportunities…I've been seeing this trend that basically has these girls who wake up and they say like, “I welcome any and all great opportunities into my life” within the first 10 minutes, because apparently you can influence your brainwaves in the first 10 minutes to think that great things are gonna…I don't know, it was something that basically invited good things to happen to you. I don't know if you believe in manifestation like that, but I don't think it hurts. 

Katie: It loses me a little bit when it starts getting supernatural. But I do think that the power of manifestation is just in clarity of vision, and you are more likely to notice opportunities and notice luck when you are attempting to manifest certain things, or call things in, or whatever the jargon is. We just spend so much of our lives sleepwalking and kinda...

Henah: Ooh, spicy take.

Katie: Yeah, like you're just kind of going through the motions. When you're focused on manifesting something, you're really just applying all of your attention and awareness toward one thing, which I think is very powerful.

Henah: I think that's a great note to end on. 

Katie: Ah, thank you. We really took a hard left there. 

Henah: We did. 

Katie: But thank you for listening to Rich Girl Roundup. This was an interesting journey we just went on together. We'll be back with another, hopefully more concise take.

Henah: Hahaha!