I Lost My Salaried Job and Now I’m Dipping Into My Savings—Here’s How I’m Working Toward Financial Stability

I’m no stranger to financial struggles. I’ve been supporting myself in the ever-expensive city of Los Angeles since I was 17 years old, mainly through underpaid creative work. But I’ve never faced money-related challenges quite like the ones staring me down at present: Last September, I was ultimately laid off from the startup where I was working full-time, leaving me not only unsure of how to go about saving after a job loss but also afford the medical expenses coming my way.

Soon after getting laid off, I learned two quite stressful things that carry financial implications. I needed to undergo surgery that would cost $60,000; and if I hoped to have a baby (I do), I’d need to do in vitro fertiliztion (IVF) within the next six months.

Regarding insurance coverage, I was fortunately able to find a surgeon who takes insurance for the particular procedure I require (most don’t). So, some percentage of the surgery’s expense will be covered, though the exact amount remains unclear. To this point, I’ve spent around $4,000 out-of-pocket on related medical expenses. I will also be incurring travel expenses because this surgeon’s practice is not local.

Unfortunately, my insurance plan doesn’t cover infertility treatments, meaning everything related to my IVF process will be an out-of-pocket expense, which I estimate at around $30,0000 per round. (And it’s often the case that multiple rounds are required to yield a pregnancy.)

This means that in the next six months, I expect to incur at least $40,000 in medical bills. My savings are just about gone, and the freelance work I’ve taken on since being laid off barely covers my monthly expenses, let alone these huge unforeseen costs. I’d like to be able to have a plan for not just paying these immediate bills, but also for saving after this job loss. I’m just not sure how to go about it.

As a result of this overwhelming financial need, I am now actively looking for a full-time job rather than sticking with freelance writing. But, because the freelance assignments I currently have—and need to retain in order to stay financially afloat—are so time-consuming, I’m having trouble finding time at all to search for a full-time job. Further pressurizing this situation is the reality that I will soon be out of commission for some amount of time due to my surgery. And if I’m very, very lucky, there will be a baby to somehow support at the end of all this struggle.

“We’ve seen layoffs across the country…people are going to wonder what to do when this happens and their best-laid plans get tossed up in the air.” —Ryan Viktorin, CFP, Fidelity Investments VP Financial Consultant

Even though the details of my situation are unique, Fidelity Investments Vice President, Financial Consultant Ryan Viktorin, CFP, says I’m not alone in navigating less-than-ideal financial circumstances these days. “We’ve seen layoffs across the country start, but it can get a lot worse in a recession,” she says. “A lot of people are going to wonder what to do when this happens and their best-laid plans get tossed up in the air. It can be very scary.”

While she and Rita Assaf, Vice President of Retirement and College Products for Fidelity Investments, agree that my situation is tough, they are able to offer guidance for managing my stress levels, triaging my finances until full-time work can be obtained, and setting me up for success in the future with regard to saving after job loss. Here are their top tips:

7 tips for creating a saving plan after job loss, according to financial professionals

1. Prioritize searching for a specific type of full-time work

First and foremost, Viktorin and Assaf tell me that my current priority—finding full-time work—is a smart one, given that it will hopefully set me up with healthy and regular pay. To this end, they point out that positions with well-established companies that have a clear business trajectory may be more likely than a startup to offer solid benefits such as retirement-saving matching and good health insurance. “Taking a job at a larger firm may provide more benefits and, therefore, stability so that you can feel like you’re climbing out of your situation,” says Viktorin.

Given the expense of IVF in my future, Viktorin also points out that some companies offer full or partial fertility benefits. So, it may make sense to research those companies specifically to see what positions they have available.

2. Figure out what I need in order to feel sane and safe during this time

Without steady income, I’ve felt more comfortable using credit cards to pay my bills so I can stay liquid rather than draining my checking and savings accounts down to nothing. (Low bank balances keep me up at night!) Assaf says this is fine if it’s helping me survive the situation with my sanity intact. “There’s no such thing as one-size-fits-all advice when it comes to finances,” she says. “If, mentally, it makes sense to keep the cash, that’s totally fine!”

That said, paying mind to the interest rates my credit cards carry is key to track because those alone could lead me to acquiring debt.

3. Make the money I do have work harder for me

With that said, Assaf notes that if I am going to keep that cash in my bank account, I should look for a high-yield savings account to transfer it into. “With interest rates rising, you could get up to four percent on your cash,” she says. “So make it work for you.”

4. Keep an eye on my credit-card balances

While she doesn’t oppose my sanity-saving strategy of generating a certain amount of credit-card debt in order to keep cash on hand, Assaf does suggest being strategic about my plastic spending. “Check the annual percentage rate (APR) on your credit cards, because if it’s too high, you may be putting yourself in a bit of a pickle over time if you’re not able to make at least a minimum payment on it,” she says.

Defaulting on that minimum payment must be avoided at all costs, says Assaf, because doing so can increase interest rates on the debt and negatively impact my credit score. Furthermore, carrying a balance at all means I’m ultimately paying more than I would if I paid in cash or otherwise in full. “Having your payments auto-debited out of your account each month can help make sure you don’t miss a payment,” she says.

5. Construct an airtight new budget

Assaf and Viktorin also tell me it’s time to create a monthly budget reflective of my current circumstance. “Budgets get a bad reputation,” says Assaf. “They’re not meant to be restrictive, but rather function as guidelines to help you understand exactly how much you can spend without having to worry—and they are for people of all income levels.”

“Budgets function as guidelines to help you understand exactly how much you can spend without having to worry—and they are for people of all income levels.” —Rita Assaf, VP Retirement and College Products, Fidelity Investments

The first step, she says, is to take an inventory of what I’m spending. “Knowing what comes in and what goes out of your bank account every month is the first step in saving money,” says Assaf. “This will give you the chance to see how much you’re shelling out for essentials (think: housing costs, groceries, insurance, debt repayment) versus what you pay for nice-to-haves, like eating out or entertainment.”

Those second-category items—the “nice-to-haves”—are what then need to be cut out of my budget wherever possible during this difficult time, says Viktorin. For example, it likely makes sense to halt my (albeit, small) monthly charitable giving until I’m back on my feet with steady income and a plan to pay down debt and resume saving, she says.

She also notes that subscription fees can really add up, so it might behoove me to inventory all those fees—think Dropbox, Netflix, etc.—and see which ones can be cut for now. These are simply her suggestions for saving, however; Viktorin notes that it’s up to me to determine my priorities and alter my budget accordingly.

6. Look into fertility-related payment plans

While Assaf acknowledges that it is difficult to get insurance coverage or any type of relief for the burden of IVF costs, she says some fertility offices do offer payment plans and notes that it’s worth asking mine if this is something they do. There also may be lower rates for paying in cash. If not, I could consider calling other local IVF providers to compare costs and payment options.

Since my current strategy is to put everything on credit cards, these options would definitely be better ways to go if possible, as the debt wouldn’t accrue interest.

7. Be ready with a plan for when it’s time to start saving again

Once I’ve exited this emergency period (*prayers hands emoji*) and resumed full-time work with a steady and secure paycheck, Assaf and Viktorin say it’s key to be ready with a new savings plan to put in place.

The first step in this direction is to name and price my savings goals—what I’m saving for (e.g. retirement, a house, an emergency fund) and how much I want to save. Because many of my savings objectives will be large, Assaf recommends approaching them with baby steps. “You may want to break your biggest goals into subgoals that you can more easily accomplish within a shorter time frame,” she says.

Once these targets are set, they can be baked into my budget, says Assaf. If my goal is to put together a $30,000 emergency fund, I can back into monthly savings goals for that fund by looking at what I can afford to save each month, the amount of time I want to take to save it, or both. Whatever monthly amount I land on will then get added as a nonnegotiable line item in my budget.

When the time comes, Assaf also says being strategic about the way in which this money is saved. For example, she says, I may want to set up separate accounts for separate goals. “For short-term goals—those you plan to accomplish within three years—you may want to stick with cash held in checking, regular savings, or high-yield savings accounts and cash-like investments, such as certificates of deposit (CDs) or money market funds,” she says.

Another consideration is to put some money in a Roth IRA, which could help me save for retirement but also afford me the ability to access funds if I need them. Unlike a number of other retirement savings accounts, a Roth IRA allows for withdrawals without penalty or taxes for a number of reasons that apply to my situation, including certain medical expenses, the birth of a child, and the first-time purchase of home.

“For savings goals that are further out,” Assaf adds, “You can consider holding a portion of your savings in investment accounts based on your timeline and willingness to take on risk.”