{"id":14490,"date":"2026-01-06T16:22:57","date_gmt":"2026-01-06T22:22:57","guid":{"rendered":"https:\/\/www.discover.com\/online-banking\/banking-topics\/?p=14490"},"modified":"2026-02-05T16:46:53","modified_gmt":"2026-02-05T22:46:53","slug":"4-steps-to-prepare-your-budget-for-a-layoff","status":"publish","type":"post","link":"https:\/\/www.discover.com\/online-banking\/banking-topics\/4-steps-to-prepare-your-budget-for-a-layoff\/","title":{"rendered":"How to deal with layoffs: A step-by-step guide to preparing your budget"},"content":{"rendered":"\n

What would you do if you were laid off from your job today? This question isn\u2019t meant to make you want to hide under your desk, but to encourage you to evaluate your circumstances. What would happen to your financial situation if you suddenly didn\u2019t have an income to rely on?<\/p>\n\n\n\n

While it\u2019s not exactly fun to plan ahead for life\u2019s hardships\u2014say, your car breaking down or losing a job\u2014doing so can help you stay afloat financially and avoid taking on debt to remedy an already tense situation.<\/p>\n\n\n\n

What can you do to prepare your budget for a layoff? Taking these four steps will help you prepare your budget for a layoff and survive a layoff financially:<\/p>\n\n\n\n

1. Put some of your paycheck into savings<\/h2>\n\n\n\n

In order to prepare your budget for a layoff, one of the best things you can do is learn to live on less when you have your typical paychecks coming in. Living paycheck to paycheck is a reality for many, and a habit many promise to break once they earn more. If you can afford it, consider trying to live off only a portion of your paycheck. That way, you can always depend on having extra money to fall back on in the event of a hardship, like a layoff.<\/p>\n\n\n\n

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Jill Caponera, a consumer savings expert, suggests paying yourself first\u2014putting some of each paycheck into savings before<\/em> you spend any of it\u2014in order to save for an unexpected job loss.<\/p>\n\n\n\n

\u201cPut money directly into your savings account the moment you get paid so that you\u2019re never in a position where you\u2019re strapped during a true financial emergency,\u201d Caponera says. Try automating your savings by scheduling an automatic recurring transfer from checking to savings that hits after each payday, or create a direct deposit to savings from each paycheck through your employer.<\/p>\n\n\n\n

If living on less isn\u2019t feasible for you right now, start small and focus on taking baby steps to prepare your budget for a layoff. You could start with a money savings challenge<\/a> and a more attainable goal, like living off of 97 percent of your paycheck and saving the remaining 3 percent. This means that if your take-home pay is $4,000 a month, your goal is to put 3 percent, or $120, into savings monthly and then limit your bills and spending to $3,880. As you get accustomed to that amount, gradually increase the percentage of your paycheck you save each period. You can also simplify your budget<\/a> by breaking it into easy percentages and saving, for instance, at least 20 percent of your income and living off the other 80 percent.<\/p>\n\n\n\n

If you devote even a small percentage of your paycheck to savings before the bills and discretionary expenses roll in, saving will eventually become habit. You\u2019ll get used to budgeting only with your post-savings take-home pay, and you won\u2019t miss the savings portion of your paycheck.<\/p>\n\n\n<\/div>\n\n\n

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\u201cPut money directly into your savings account the moment you get paid so that you’re never in a position where you’re strapped during a true financial emergency.”<\/p>\n