How To Financially Prepare For A Layoff

Layoffs don’t always make the news first. They show up in people’s group chats.

The “just between us – I think they are cutting our team” messages. 

The “my manager’s suddenly skipping our 1:1s” texts. 

The LinkedIn posts with the little green banner that say “Open to Work” from people you didn’t expect.

Maybe you’re feeling the uncertainty at your own company. Maybe you’re watching colleagues getting let go around you, and you’re silently wondering if you’re next. Maybe nothing’s happened yet, and you just want to be ready.

All of that is valid.  And that’s exactly why this needs your attention.

Because here’s the thing about layoffs: the people who recover fastest aren’t the ones with the biggest salaries or the most impressive resumes. They’re the ones who weren’t caught completely off guard financially.

You don’t have to wait for bad news to get ready. You can start now.

Here’s where I’d start:

1. Take a financial pulse check 

Before anything else, you need to know where you actually stand right now.

How many months of expenses do you have saved? What is your actual monthly spend? Are there any big costs coming up in the next 90 days – a renewal, a trip, a family expense you’ve mentally filed away?

You cannot build a plan on a number you’re guessing at. Pull the actual numbers, and look at them, even if it makes you uncomfortable…especially if it does.

2. Know exactly what you owe every single month

Rent or mortgage.
Utilities.
Insurance.
Childcare.
Minimum debt payments.
The subscriptions you’ve forgotten about.

Write them all down. Add them up. That total – your bare-minimum monthly number – is one of the most important figures you can have in a moment like this. It tells you exactly how long you can sustain yourself without income.

Once you know that number, you stop guessing. And that alone can make you feel more in control. 

3. Check what your employer actually covers, before it’s gone

This one often gets overlooked until it’s too late.

Log in to your benefits portal this week if you have one. 

You may see benefits like: extended health, dental, drug coverage, and vision. Then find out what happens to those benefits the day a layoff takes effect.

Do they end immediately? Is there a conversion option that lets you keep some of this privately?

Do the same for your employer’s retirement contributions. If they match your RRSP or pension, that stops the moment your employment does. Understand what you’d be walking away from so that nothing catches you off guard. 

4. Build or refill your short-term buffer

The goal here is to have three months of expenses in a savings account that you can access the same day you need it.

In a situation like a layoff, access matters as much as the amount.

Money tied up in investments can lose value if you have to pull it out at the wrong time. Some accounts also take days or weeks to access.

What you want here is to have cash you can use immediately, without delays or penalties.  

If you’re not there yet, start building toward it now. Even small, consistent contributions over time can put distance between you and a crisis. The point is to have something to stand on if the ground shifts.

5. Find the breathing room inside your current budget

Look at your expenses and check what can be paused, reduced, or renegotiated if you need to move quickly.

Some subscriptions can go today. Some insurance policies can be repriced with a single phone call. And some bills have options you’d never know about unless you ask – Rogers, for example, has a payment arrangement program for customers going through financial hardship. So does Bell. Most people don’t know this because nobody advertises it. 

6. Protect your credit before anything changes

A layoff is not the time to start relying on credit. It’s the time to make sure your credit is clean enough to be an option if you need it.

Pay your minimums on time, every time. Keep your balances low relative to your limit. And resist opening new lines just because you’ve been pre-approved. 

7. Have a rough plan for an income gap

If your income stopped tomorrow, what would you do?

In Canada, Employment Insurance (EI) can cover up to 55% of insurable earnings, up to a maximum, and it takes a few weeks to process after you apply. Know how much you’d realistically get and for how long.

If you’re let go with severance, understand what you’re entitled to.  

Also, think about whether there’s a skill you could freelance, a side income you could activate, or a way to bring in even $500–$1,000 a month in the short term. That kind of bridge changes the math significantly.

What this means for you…

If a layoff happens to you, or someone you love, please don’t let it become a story about your worth.

It’s a business decision made by people in a room looking at a spreadsheet. It’s not a verdict on what you’re capable of, how hard you worked, or what you deserve.

The way you feel about yourself has to stay separate from what a company decided to do with a headcount. That’s easier said than done. But it’s true. And it’s worth repeating to yourself, out loud, as many times as you need to.

The goal of everything above isn’t to live in fear. It’s to be so prepared that if something does happen, it’s an inconvenience you can manage.

If you want to build this kind of financial readiness with people who are doing the same work alongside you, that’s exactly what the Don’t Go Broke Collective is for.

Join the accountability group

I started the Don’t Go Broke Collective because I kept seeing the same thing: people who had the intention, but not the follow-through. 

Doing this alone is hard. Motivation fades. Life gets busy. And without anyone to check in with, things like reviewing your finances, sticking to your plan, and making consistent progress get pushed to next month.

This is where that changes.

We meet twice a month, track progress, and do the work together. Members set goals and stay accountable to them. 

They celebrate when they hit a milestone they’ve been working toward.

And when a hard month hits, they still show up and do the work.

Last year, this community collectively saved over $1.2 million.

This month, we’re going deep on credit and debt. You’ll understand what it’s actually costing you and how to get out of it faster. We’ll also introduce bonds and fixed-income investing, so you can start thinking beyond just saving. There are also optional panels and bonus sessions throughout the month.

You don’t have to figure this out alone. Anymore.

CTA: Join the Don’t Go Broke Collective

For my Nigerian community: You’ll need a VPN to access Skool. Make sure you have one set up before you join so you can get straight in.

Until next time,

xoReniP.S. What’s the one financial thing you’d want to have in place before a layoff? Hit reply and let me know. I would love to hear!