A man researches how to manage bills and other finances after a layoff.

Managing Finances After a Layoff


COVID-19 has impacted Americans and the ability to prioritize financial obligations. From mortgages to bills, here's how to manage finances after a layoff.

Since the start of the coronavirus pandemic in March, the economic decline has impacted millions of Americans and their ability to juggle financial obligations. According to research conducted by the Economic Policy Institute, it’s estimated that 20 million workers will be laid off or furloughed by July 2020. With the likelihood of a layoff being an unfortunate reality for many, it’s important to have a plan for paying bills after a job loss. Here are some expenses to make sure you can cover in the event of a layoff.

Housing Expenses

Keeping a roof over your head is probably the biggest concern after an unexpected job loss. Although it’s stressful to figure things out, there are resources available if you have trouble making your mortgage or rent payment.

If you’re a homeowner, reach out to your loan servicer as soon as possible. Many banks have allowed mortgage borrowers to postpone payment for a brief period or make payment arrangements after an income loss. You might also be eligible for forbearance if your mortgage is federally backed, based on guidelines from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

For renters, contact your landlord or property management company and see if they will accept a partial payment or reduce rent for a month or two. If you’ve been renting for a while and have a solid payment history, odds are good that they’ll be willing to work with you.

In addition, the CARES Act and many states have declared a moratorium on evictions during the pandemic, which means landlords can’t charge late fees, penalties, or serve an eviction notice if you’re unable to make rent. However, this moratorium only applies to properties with federal mortgage backing so it’s a good idea to find out if your situation makes you eligible.

Food and Everyday Essentials

Along with housing, food is another essential you’ll need during any period of unemployment. Depending on how much income you receive through unemployment or other sources, you may qualify for the Supplemental Nutrition Assistance Program (SNAP) benefits. Visit the SNAP eligibility page to find out more about requirements. Resources like 211 also help you to find local food banks and pantries for immediate needs.


After a layoff, your first step is to check with your previous employer to find out if you will still receive health insurance coverage for a period of time, and if so, for how long. Other options for coverage after a job loss include COBRA, the Affordable Care Act (ACA), and Medicaid if you meet income requirements.

For car insurance, some insurers have offered to credit monthly premiums in light of recent stay-at-home orders. Check with your insurer to find out if this applies to you or to make payment arrangements and avoid losing coverage.


For services including water, electric, gas, cell phone, and internet, check with each of your providers to find out about available emergency payment plans. Some states have made temporary policies to prevent utility shut-offs for past due accounts. However, it’s still a good idea to reach out on your own first and explain your situation before this point.

Student Loans, Credit Cards, and Car Loans

Under the CARES Act, federal student loan borrowers are not required to make payments until September 30, 2020. If you have private student loans, reach out directly as some lenders have also provided temporary forbearance options. For credit cards and auto loans, speak with your bank about arrangements if you can’t afford your upcoming monthly payments. Several banks and credit unions will allow customers to defer payments or make partial payments if they are facing financial difficulties.

Payment Options After a Layoff

Emergency Savings

It’s recommended to have at least three to six months of savings in the event of a job loss. Still, saving that much can take years and you might be a long way from that number. If you’re fortunate to have some emergency savings set aside, this money should be your go-to before you use a credit card or tap into retirement savings.

If you don’t have a fully-funded emergency cushion, not to worry. Every little bit helps when you’re low on cash. $100 or $200 can be enough to put gas in your car or purchase groceries for a few weeks. And if you’re able to stay even one month ahead on your bills, it can provide some much-needed relief as you take steps to find your next job.

Credit Cards

It’s best to limit the amount of debt you take on after a job loss, but in an emergency situation, it’s sometimes necessary to use credit cards to stay afloat. Being able to cover the essentials will give you some peace of mind as you adjust to a loss in income. Should you need food, gas, or other emergency items and don’t have cash on hand, use a credit card as you see fit.

The key is to be very specific about what qualifies as a necessity. Be conservative with credit card usage and think of it as a short-term solution rather than an unlimited source of cash. Also, make plans to pay off any balance you accumulate once you get back on your feet.

Retirement Savings

It’s not ideal, but if you don’t have cash or enough credit available, you might have to withdraw funds from retirement to cover bills. Under new rules from the CARES Act, borrowing limits for 401(k) loans have been raised from $50,000 to $100,000 and may allow some borrowers to delay repayment. During this time, loans taken out from retirement funds will not come with a tax penalty. Additionally, you may withdraw money from your 401(k) directly, and the 10% early withdrawal penalty will be waived up to $100,000.

Other Resources

While it may be a challenge to maintain your financial wellbeing during this time, remember there’s help available. For additional resources and support, review this checklist to help you stay on track with bills and other financial goals.

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