By Maura Keller
A layoff can be one of the most destabilizing moments in a person’s life — not just because of lost income, but because of the emotional strain that often accompanies it. The sudden disruption can shake anyone’s sense of routine, identity and control, creating uncertainty that extends far beyond finances.
Just ask Kristin Wensing, sponsorship and corporate giving officer at the Wisconsin Historical Foundation, who has experienced a layoff.
“I found job loss disorienting,” Wensing says. “It disrupted both the structure of my life and my sense of identity. Work shapes how we move through our day, how we measure progress and even how we describe ourselves. When that suddenly disappeared, I felt unanchored.”
Even when actively job searching, the experience can feel contradictory.
“There’s a strange mix of urgency and waiting while you’re unemployed — you feel like you need to act quickly, but you have little control over timing,” Wensing says.
According to Amy Schubert, senior vice president and private wealth management Wisconsin market leader for U.S. Bank, resilience during a layoff depends on both mindset and money management.
“Resilience from both a mental and a financial perspective during a layoff is critical, and the two are inextricably intertwined,” Schubert says. “When people are in a situation like a layoff, it can cause them to make rash decisions.”
To stay grounded, Schubert encourages individuals to focus on three priorities: getting organized, educating yourself on your options and building a clear plan you can return to during stressful moments.
A strong foundation starts with budgeting and an emergency fund.
Schubert advises individuals to maintain savings that cover at least three months of household expenses, working toward six months for primary earners or those with higher fixed costs.
“Creating a clear and honest budget — one [that] you revisit regularly — helps you identify your true emergency fund needs,” she says.
That budget should capture more than just everyday spending. Periodic and often-forgotten expenses — such as taxes, insurance premiums, tuition, utilities and loan payments — should also be factored in.
“Too often, people underestimate their spending or leave out big expenses that can fall right when you need your emergency fund most,” Schubert notes. Having a clear picture of expenses can provide both financial clarity and peace of mind.
When balancing debt repayment and cash preservation, Schubert encourages prioritizing liquidity.
“Focus first on emergency-fund building,” she says, adding that credit cards shouldn’t take the place of creating a plan and an emergency fund as they can create risk for overspending, which can jeopardize current and future financial stability. “Numerous studies show people spend more when using credit cards than cash, which can create bigger problems down the road,” she continues.
Cash-flow planning is equally important. Essentials such as food, housing, health care and personal safety should always come first. From there, households can temporarily trim discretionary spending while checking in weekly or biweekly to stay aligned with their plan.
Organization also plays a critical role during a layoff. Schubert recommends documenting employment-related benefits both before and after separation, including severance agreements, recent pay stubs, personal time off balances, equity or commission schedules, and health insurance options.
“The more organized you are, and the more you arm yourself with knowledge and data points, the better off you will be,” she says.
Decisions about severance taxes and retirement accounts add another layer of complexity.
“There are many nuances to 401(k) and other retirement plan decisions,” Schubert explains. While leaving assets in an employer plan can be the simplest short-term option, rollovers may offer more flexibility. Cashing out, however, is typically a last resort.
“The critical thing to remember,” she says, “is that you have options. Taking the time to understand any impacts they will make to your financial picture is a necessary step.”
For Wensing, navigating job loss ultimately reshaped how she views stability and control in her career. While no one is ever fully prepared for that kind of disruption — especially when it lasts longer than expected — she approached it with tenacity and hope.
“I focused on adapting: building new routines, staying connected with my network and reframing the experience as an opportunity to learn rather than something to rush through,” Wensing says. “I stayed persistent in my search, while also giving myself grace and time for reflection and activities that helped me maintain balance and perspective throughout the process.”
