Put the most critical aspects of your financial situation in writing. Probably one of the most important things I did was figure out where we were financially, write it out on one and a half pages, and give the document to my wife. I summed up how long we had before we used up her severance and then the rest of our cash in a particular savings account, and what our lives would be like at four different levels of income she might receive for a new job. I also outlined how possible positive events could affect the long-term scenario, like me getting an expected raise at the end of the year and the prospect of eventually refinancing our mortgage when she landed. While she was not jumping for joy with the news—who would be—writing this out was ultimately reassuring because there was some better than expected information, and my putting it together gave her confidence that I had a handle on the situation. She did not need to get a job that paid the same as her old job for us to continue towards our major aspirations as a couple, and even if she found a job paying below what we needed to keep things on track, good things that could mitigate the shortfall were likely to happen.
Look in to the tax ramifications of the layoff and if appropriate reduce your tax withholding. A point related to getting a handle on your financial situation with the layoff is to assess the tax ramifications and how they might help you. If you have a mortgage and file jointly, particularly if you purchased your home in recent years and have a large tax deduction for interest expenses, you may be able to reduce the tax withholding from your salary since the benefits of the deduction were previously spread between two salaries but now are not. This complex calculation can turn on other factors too—such the tax ramifications of any severance package your spouse received, and whether tax is withheld from your spouse’s unemployment benefits. But since checking your withholding may help address the shortfall of going from two incomes to one, it may be worth consulting a professional tax advisor if you’re not comfortable doing it yourself.
Identify options for what to do if the unemployment continues beyond a certain point. A point related to putting the financial situation in writing is to think ahead on what you can do as a couple if an offer does not materialize before a given point. This may not be something that is productive for you to speak with your partner about regularly, but just as he/she will be occupied in thinking about to how get her or his career back on track, you can think of how to keep the ship sailing while finding the new job is in the works. Mention this to your spouse at the right times to provide assurance that regardless of what happens, things will work out in the end and you will be together.
In our case, we had established a regular plan for investing before the layoff, including regular tax deferred contributions to our retirement accounts and monthly stock purchases. Because the market was at historic lows and we had reserves to pick up the shortfall while my wife looked for a job, we had continued these regular investments. Even as we did this, I began to review alternatives for what we could do to stretch our savings if the situation continued. I determined that if we stopped the stock purchases, reduced my retirement contributions to the minimum level required to receive all the matching contributions, and changed the federal tax withholding on my paycheck to adjust for the loss in income, we could go another three months on the account we were using for the shortfall. As things turned out she got her offer before we needed to take these steps, but knowing that the option was available made things easier as time went on.
[...] How to Help Your Unemployed Spouse Find a New Job After a Layoff [...]
Thanks I really needed this.