If it was TV, it would be around 10 a.m., and you’d be sitting in a dark bar, watching your third or fourth scotch, wondering how to get home and tell The Spouse you’ve lost your job.
A little cliché perhaps, but much more plausible than the reality of 2020, the year that started with such financial promises and then turned – is still evolving – into so many more scenarios. more bizarre that we hardly react to it anymore. A deadly coronavirus pandemic? Grocery shelves emptied of cleaning supplies, food and toilet paper? Home orders. Masks no, then masks yes. Bars, restaurants, gymnasiums, hairdressing salons closed. A collective apnea. Relaxed restrictions. A new wave of infections. Tap replay.
“That was the year I was going to get this raise,” you thought. Now it’s “I’m fired”.
Now you’ve got a mortgage or rent to pay, a car payment, maybe kids … and little in the way of savings.
What are you doing right now?
First, don’t panic. That’s the first piece of advice from Financial Advisors Erin Nelsen, a Certified Paid Planner and Asset Planners partner at Cypress; Chris Browning, financial analyst who created and hosts the “Popcorn Finance” and “This Is Awkward” podcasts (“Where We Discuss Finance in About the Time It Takes to Make a Bag of Popcorn”); and Louis Barajas, Certified Paid Financial Planner at MGO Wealth Advisors in Irvine and author of several books, including “My Street Money”, “Overworked, Overwhelmed & Underpaid” and “Small Business, Big Life”.
Many people who started the year with stable and seemingly strong jobs are now out of work because of the coronavirus. The 4% unemployment rate that seemed so rosy in January is now 11% nationally and nearly 15% in California, according to the Bureau for Labor Statistics, so you are certainly not alone.
We asked Nelsen, Browning and Barajas for advice on what people should do after losing their jobs. All three agreed that the first step (aside from avoiding the 10 a.m. scotch tape) is to stay away from the blame game, especially self-blame.
“It takes a heavy mental toll; the fact that you’ve had this huge financial disruption in your life through no fault of your own,” Browning said. “Give yourself a little grace and a break, because in a lot of these situations, you couldn’t have done anything to make things turn out differently.”
Browning said he tasted the poison of self-blame after he and his wife put $ 27,000 on their credit cards in the first few years of their marriage, more than half of their household income. “I really fought over it,” he said. “‘I went to school for that,’ ‘I should have planned.’ … I thought about it all the time, even at work. How could I let things go so badly? “
He and his wife budgeted – several, in fact – and finally paid off the debt in two and a half years, but the cure began by talking about it, he said, with his wife and a close friend, who listened without judgment. “You want someone who can be nice to you in their responses, not someone who will beat you up,” Browning said.
And if you’re honored to be chosen as the designated listener for a friend and family member out of work, Browning said it’s important to remember that your role is supportive listening. “Avoid toasting them with questions like ‘What happened? Or – mom’s thing – ‘Did you say something rude in a meeting ?!’ “
The biggest mistakes with money are made out of fear or greed, Barajas said. “You don’t want to panic or be afraid; that’s when the old reptilian brain kicks in with knee-jerk financial reactions. You want to be proactive and prepare.”
In other words, don’t max out your credit cards by pretending everything will be fine. There is no shame here, said Browning. We are all in the same uncertain boat. “This situation is so unprecedented, no one has been prepared for this or even experienced this in our lifetime.”
Instead of wallowing or hiding, now is the time to dive into your financial situation and make a plan, said Nelsen, who has two college-aged children living at home because they both have been made redundant from their part-time jobs. Her two children were eligible for unemployment benefits, and they live at home for free, but in return, Nelsen said she insisted they budget and save as much money as possible in case they were. still out of work. when their unemployment checks run out, which in California is after 26 weeks.
“I asked them to take an inventory of all their expenses and be really honest about what is necessary and useful versus discretionary spending,” Nelsen said. “With my kids, like with most people, you can say in your head that something is a ‘need’ but it’s really just a ‘want’. They don’t ‘need’ to have their subscription. Spotify for a living. “