What should I do with my money the first week after a layoff?

Three things. File for unemployment so the waiting period starts now, not later. Stop the variable spend — restaurants, rideshares, impulse buys — for the week while you get oriented. And list every account you have in one place. You are not building a budget yet. You are getting a picture of the ground you are standing on.

When do I need to make the COBRA versus ACA decision?

Inside the first 30 days, ideally by the end of week two. COBRA elections are usually due within 60 days, but ACA marketplace plans take time to activate and you may qualify for a larger subsidy now that your income has dropped. Run both numbers for your real situation before the deadline rather than after it.

Should I stop my 401(k) contributions after a layoff?

If you were laid off, your contributions stop automatically when the paychecks stop. If you are still receiving severance in payroll form, contributions may continue. Look at your last pay stub. The bigger question is what to do with the existing balance — leave it, roll it, or move it — and that decision can wait until month two.

How do I know if my severance withholding is right?

Federal supplemental wage withholding on severance is typically a flat 22 percent up to one million dollars. If your normal effective tax rate is higher than that, you may owe at tax time. If it is lower, you may be over-withheld. A CPA can tell you in 15 minutes whether to adjust withholding on remaining payments or plan for a year-end true-up.

Is it worth working with a financial planner during a layoff?

For most people, a one-time hourly session with a fee-only fiduciary planner is the right level. Two hours covers runway, health insurance, tax withholding on severance, and the 401(k) decision. Look for the NAPFA or XY Planning Network directories. Avoid anyone selling products on commission while you are in a cash-flow crunch.

Financial planning the first 30 days after a layoff

By Kyle Shaddox Published · May 12, 2026 7 min read Money and runway

The most important move in the first 30 days after a layoff is sequencing — doing the right things in the right order, not trying to solve everything at once. Most people who feel underwater financially after a layoff are not actually underwater. They are doing month-two decisions in week one, and week-one decisions never. The result is the same panic that good sequencing prevents.

What follows is the order of operations. Three time windows, each with a short list of moves that matter and a longer list of things you can ignore for now.

What should I do this week?

This week is about stopping the bleeding and getting a picture. Nothing more.

The first move is filing for unemployment. Most states begin the waiting period the day you file, not the day you were laid off. Every day of delay is a day of income you do not get back. If you have severance, file anyway — in many states severance affects when benefits start, not whether you receive them at all, and the rules vary enough that you want the claim on file while you sort the rest out.

The second move is stopping variable spending for one week. Not forever. Not a budget. One week. Restaurants, rideshares, impulse purchases on Amazon, the small “treat yourself” buys that pile up when shock is high — pause all of them for seven days. The point is not to save money. The point is to break the auto-pilot so the spend numbers you look at next week reflect a decision, not a default.

The third move is a single document listing every account you own. Checking, savings, brokerage, 401(k), IRA, HSA, credit cards, mortgages, student loans, auto loans, recurring subscriptions. One page. The balances do not need to be exact. The list does not need to be pretty. You need a complete picture in one place, because the decisions in week two and beyond all depend on it.

What should I do this month?

The second and third weeks are about two specific decisions and one number.

The health insurance decision

You will have a COBRA election notice within two weeks. The deadline is usually 60 days from your separation date, but the decision shapes the rest of your month, so do not push it to the back of the drawer.

COBRA is the same plan you had at work, but you now pay the full premium plus a 2 percent admin fee. For a single person, that often lands in the four to eight hundred dollar range monthly. For a family, it can be substantially more. The exact number is on your COBRA notice.

The ACA marketplace can be dramatically cheaper if your household income for the year drops, because subsidies are based on projected annual income. A layoff in May with limited income for the rest of the year changes that calculation significantly. Run the numbers at healthcare.gov with your projected annual income, not your old salary. If you are within a Special Enrollment Period — and a layoff triggers one — you can enroll outside the usual fall window.

A separate guide walks through this decision in depth, including spouse plans, short-term coverage, and Medicaid. Pick a path by the end of week three so you are not paying a backdated COBRA bill out of fear.

The new monthly burn number

The other big move this month is locking a new burn number — what your household actually spends each month under the new reality.

Pull the last three months of credit card and bank statements. Categorise into fixed (rent or mortgage, insurance, debt minimums), fixed-flexible (utilities, groceries, gas), and variable (everything else). The total is your real burn — not the aspirational number on your spreadsheet.

Then build a second version: the same categories but trimmed where you choose to trim. Do not cut anything yet. You are designing two pictures: real burn now, and target burn for the search. The target version informs how long your runway actually is.

CareerCanopy is built for exactly this stretch — when the question is not whether the work will get done but in what order, and when a steady voice on the small decisions changes the next three months.

What should I do this quarter?

The third window is for the slower-burn decisions that do not need to happen in week one but should not slip past month three.

Review tax withholding on severance and unemployment

Severance is taxable income. Federal supplemental wage withholding is typically a flat 22 percent on amounts under one million dollars, but the actual federal tax rate you owe is based on your full year’s income. For someone in a higher bracket, the 22 percent withholding can mean an underpayment by April. For someone whose total annual income has dropped substantially, it can mean an over-payment.

State withholding varies by state. Some states withhold supplemental wages at a flat rate, some at the same rate as your other wages, and a handful have no income tax at all.

Unemployment benefits are federally taxable. Most states give you the option to withhold 10 percent federal automatically. Take it. Owing taxes on benefits in April is a common surprise for people who skip this step.

If your total tax picture is unusual — large severance, mid-year layoff, equity vesting, spouse’s income changing — a CPA or enrolled agent for one hour is worth more than any tax software. Get the projection done by the end of August so any adjustments to estimated taxes can happen before year-end.

Decide what to do with your 401(k)

You generally have four options for an old 401(k):

Leave it where it is, if the plan allows balances over a minimum threshold
Roll it into your new employer’s 401(k), once you have one
Roll it into a traditional IRA
Cash it out — usually a bad idea, covered in a separate guide

This decision does not need to happen in month one. It often makes sense to wait until you have a new job and can compare the new plan’s investment options and fees against an IRA. If you do nothing, your old 401(k) generally stays put. The wrong move here is panic-cashing the balance to cover short-term expenses, which costs roughly 30 to 40 percent of the withdrawal between federal tax, state tax where applicable, and the early withdrawal penalty if you are under 59 and a half.

Look at long-term insurance and estate basics

If you had a term life insurance policy through work, it ended with the job. If a spouse and kids depended on that coverage, replace it now — premiums for a healthy adult in their thirties or forties are still affordable, often under thirty dollars a month for a reasonable term policy. Do not drop existing personal term policies to save money. The cost of letting one lapse and re-applying after a health change is almost always more than the premium you saved.

Disability insurance through work also typically ends. Replacing it as an individual is harder and more expensive, but worth a quick conversation with a fee-only planner if you are the primary earner.

A short, ordered list for the first 30 days

Pin this somewhere you will see it:

File for unemployment today. Stop variable spending for one week. List every account in one document.
Get your COBRA notice on the table within seven days. Run the ACA marketplace numbers using projected annual income. Pick a path by end of week three.
Build two burn numbers — real and target — using the last three months of statements.
Confirm withholding is set up on unemployment benefits.
Decide whether your severance withholding needs adjustment, ideally with one short call to a CPA.
Replace term life insurance if it ended with the job and your family relied on it.
Park the 401(k) decision until month two or until you have a new role.

What you can ignore in month one

Some things look urgent and are not. Specifically:

Refinancing your mortgage to lower the payment
Selling investments to “lock in” gains or losses
Opening new credit cards “in case” you need them later
Setting up a complex side business as a tax shelter
Tax-loss harvesting before you know your full year’s income
Aggressive 401(k) rollover decisions before you have a new plan to compare

The first 30 days are not the right window for any of these. Month two onward is fine. The cost of moving on most of them in month one is higher than the cost of waiting six weeks.

When to call a professional

A short, honest list of when to spend money on advice:

A CPA or enrolled agent — once before year-end if your tax picture is unusual
A fee-only fiduciary financial planner — one hourly session if runway is tight or the decisions feel heavy
An employment lawyer — 15 to 30 minutes before signing a severance agreement with anything non-standard
A health insurance broker — free in most states, useful if your family situation is complex

None of these require ongoing fees. All of them are worth more than they cost when the stakes are real. A clean first 30 days does not require getting every decision right. It requires getting the order right and giving the bigger decisions room to be made well.