For many Marylanders, job security feels more uncertain than ever. With federal budget cuts impacting government agencies and contractors, thousands of workers in Baltimore, Anne Arundel, Montgomery, Frederick County and beyond are facing potential layoffs. In fact, some companies that depend on federal contracts have already begun workforce reductions, leaving employees scrambling to secure their finances.
If you’re worried about your job, you’re not alone. Being proactive now can help you build a safety net and stay in control of your financial future.
Understand your financial position and employment benefits
Before making any decisions, take time to evaluate where you stand financially and what resources are available to you.
What you can do now to prepare for a potential layoff
- Take stock of your finances: Review your income, expenses, savings, and debts. Prioritize essentials like housing, food, and healthcare, and identify areas where you can cut back.
- Strengthen your emergency fund: If you’re still employed, try to save as much as possible. Even setting aside a few extra paychecks can help provide a much-needed financial cushion.
- Review your debt obligations: If you have high-interest debt, consider paying it down while you still have a steady income. Investigate refinancing existing loans to a lower rate. If a layoff seems imminent, avoid taking on new debt.
What to do if you are laid off
- Understand your severance package (if offered): Some employers provide severance pay, extended health benefits, or job placement assistance. Review your documentation carefully and ask HR for clarification if needed.
- Apply for unemployment benefits: Maryland’s Department of Labor offers unemployment assistance, but processing times vary. Apply as soon as possible to avoid gaps in income.
- Look into health insurance options: If your employer-provided health insurance ends, consider COBRA, a spouse’s plan, or Maryland’s health insurance marketplace.
- Reach out to your creditors: If you anticipate trouble making payments, contact your lenders as soon as possible. Many creditors offer temporary relief programs.
Manage bills and debt during a layoff
With reduced income, prioritizing expenses is essential. A strategic approach can help you avoid long-term financial setbacks.
Prioritize essential expenses
If money is tight, focus on covering the essentials first.
- Housing costs: Rent or mortgage payments should be your top priority. If you anticipate difficulty paying, contact your landlord or lender immediately about potential hardship programs.
- Utilities: Electricity, water, and internet should be prioritized. Some utility companies offer payment assistance or flexible payment options.
- Groceries and healthcare: Make a plan for affordable, nutritious meals and ensure you have access to necessary medications and healthcare coverage.
- Minimum debt payments: Stay current on minimum payments for credit cards and loans when possible to avoid late fees and damage to your credit score.
Proactively communicate with creditors
If you’re struggling to make payments, contact lenders before you miss a due date. Many offer hardship programs, but you have to ask.
- Be honest about your situation: Explain that you’ve been laid off and inquire about available assistance.
- Request payment deferrals or reduced payments: Some creditors allow temporary payment pauses, reduced interest rates, or extended repayment terms.
- Get agreements in writing: If a lender offers relief, ask for written confirmation of the new terms to avoid misunderstandings later.
Avoid costly financial mistakes
- Don’t rely on credit cards for essentials: While it may seem like an easy short-term fix, relying on high-interest debt can create long-term financial strain.
- Avoid early withdrawals from retirement savings: Cashing out a 401(k) or IRA early can result in penalties and reduce long-term financial security.
- Steer clear of payday loans or high-interest borrowing: These quick-cash solutions often come with extreme interest rates that can make financial recovery even harder.
Get back on track with a SECU financial wellness checkup
A layoff can feel overwhelming, but you don’t have to navigate it alone. The key is to stay proactive, whether that means reassessing your finances, reaching out to creditors, or preparing for new job opportunities.
At SECU, we’re here to help. As a credit union built for Marylanders, we’re your financial partner through life’s ups and downs.
When you schedule a free financial wellness checkup with the SECU Virtual Financial Center, you’ll get:
- A personalized review of your financial situation, so you know exactly where you stand.
- Guidance on managing bills and debt, including how to prioritize expenses and communicate with creditors.
- Support in building a financial safety net, preparing you for whatever comes next.
You’ve worked hard to build your financial foundation. Let’s protect it together. Schedule your free financial wellness checkup today.
