Fix Emotional Spending Habits with Feel-Good Finance and Learn How to Manage Finances Post-Job Loss

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16:48Elizabeth Ayoola:We're back and we are answering your money questions to help you make smarter financial decisions. This episode, we're joined by Brie, a listener in Chicago who's working through the financial aftermath of losing their job. Hi, Sean. Hi, Elizabeth. It's so nice to meet you all.

17:03Sean Pyles:We're happy to have you here. To start, I would love to hear about your finances generally right now. What feels good? What feels maybe a little bit challenging? Right now, it feels good that I have enough funds to get through the next four to six months if I have to. I should probably mention part of the reason that I'm here is because of job loss. My position was terminated three and a half weeks ago now. Sorry about that. Thank you. So I've already stripped down to the bare essentials in terms of my budget, and I feel really good about my ability to be disciplined with substantially cutting those back.

17:43I live a pretty simple life. So even though I had a well-paying job, I don't feel stressed about managing things for several months if I have to.

17:52Sean Pyles:Well, that's the benefit of having an emergency fund like you had. Four to six months worth of savings is great. You should be really proud of yourself for building that up. And now you're able to use it to help you right now. Thank you. It's been eye-opening because that's something I've stressed about a lot in the past is do I have enough emergency savings? Interestingly, part of the reason why I do is because I was in the process of moving to Chile when all of this happened. So I had been building up extra savings for that already. So I have easy access to a good amount of money that I feel good about.

18:26On the stressor side, I'd say the two big stressors right now are health insurance coverage and secondly, not really knowing how long this is going to last. So on the health insurance side, I did get the COBRA information from my company and it's very expensive. But I have seen all my doctors recently because of that planned move. So I don't anticipate that I'm going to need something. But of course, there could always be some sort of surprise. Right.

18:56Elizabeth Ayoola:So how have you been navigating the emotional side of things? Because I have lost my job before and it's not a great feeling. And sometimes it can take some time to process that. And then also, hopefully you still get to move to Chile. But I can imagine it was very disappointing, too, because you had that plan in motion and maybe have to pause now. Emotionally, it's been a roller coaster. I was completely blindsided by this decision. I had no idea that it was coming and really honestly didn't get much of an explanation other than restructuring and cutting back. They've chosen to eliminate my role in that process.

19:35So that's really been challenging to not know why. And if there are things to learn on my end that I can do that for future opportunities. But they gave the impression that there was nothing on my end. Both the CEO and my supervisor wrote letters of recommendation for me, which I'm so grateful for. So that's reassuring.

19:57Sean Pyles:Yeah, I imagine that it'd be hard to not have a sense of closure about that. Is there something else? You know, that question could be a little nagging. Absolutely. It really is. And so I've kind of gone through the range of emotions of confusion and anger to frustration to everything in between, optimism about what's to come, excitement, trying to view it as something better will come of this. It seems like you're doing the right thing, taking the time and space to grieve because job loss can be one of the most difficult things to go through. So I think even though it's hard, it's important to sit with that and process all of your emotions and realize that you're going through the various stages of grief, which don't happen in the order you might expect.

20:41Sean Pyles:They can kind of come and go in different orders, and that can be confusing too. But I like that you're thinking about what good could come of this, because that's a question that a manager asked me to think about in my own context when I was going through a hard time with my job. Even though things might have seemed challenging then, there was a lot of good that came from it. And it seems like you might be at a place where you can pivot your dreams and your career a little bit.

21:07Elizabeth Ayoola:So I do have a question for you because you did write to us about potentially having to navigate different kind of careers that is outside of what you typically do. Since you primarily have been a remote worker, how is that search going? And are you open to non-remote jobs? Yeah, that's a great question. So I would say in short right now, I'm prioritizing remote work. And I'm really not looking at hybrid or in-person because of those personal life goals that I want to continue with. If push comes to shove and things are not panning out, obviously I've got to be open at some point in the process to consider alternatives.

21:44I got enough like easy access to funds and savings and things like that to go, you know, for four to six months or so, I would say. I have other options beyond that, like tapping into my retirement. I have credit cards that are untapped. I could take a personal loan. There are options. Some of those are absolute last resort for me and that I really, really don't want to do them. But I just am curious about how I should think about tapping into something like that versus adjusting my job search criteria.

22:23Sean Pyles:I tend to be pretty risk averse. And going into debt, especially tapping your retirement to cover expenses, those two are really risky options. Your retirement, if you pull from that, that could mean that you are less able to fund your retirement later on. And debt can be really expensive and difficult to get out of, especially if you find yourself in a bind with your employment. so I would encourage anyone uh Bree yourself included right now if you are not employed to try to find some kind of work even if it's just part-time we know from NerdWallet's 2025 labor market report that the typical time that people are remaining unemployed is around 10 weeks right now and that has been increasing over time so it seems like the job market is in a bit of a shaky place right now, the company you were working for had a round of layoffs.

23:15Sean Pyles:So even if you're not working your ideal job, maybe it's not in your field or exactly what you want to be doing, getting some kind of income stream should be the priority. And yes, you have four to six months worth of savings, and that's fantastic. It can take almost that long to get hired, depending on the company that you're interviewing with. So starting that process now should be the priority. Yeah, that totally makes sense. The very first thing I did was file for unemployment. And thankfully, that was approved. I certified for the first time last week. And one of the questions is, did you turn down any paid work?

23:52And that's in the back of my mind as I think about like a part-time role, for example, where it's something to help get me through. But does that compromise or jeopardize the unemployment if I say yes, that I turn down something or even a full-time role for that matter?

24:12Sean Pyles:I am not entirely certain how saying whether you turn down a role could impact your unemployment benefits. That's something that you would want to ask that office about because the rules can vary by state. But in general, if you are working a job, even if it's just a part-time job, that can impact the amount of unemployment benefits that you receive. You could still receive partial benefits if you're working while on unemployment insurance, but you have to report the income that you're getting.

24:40Elizabeth Ayoola:I also wanted to ask you kind of related to what you're saying. I know that when I have gone through gaps in my resume, whether it be leaving a job or losing my job, I have always leaned on contract work. So how much of an option is that for you? Are you open to that? Are there freelance opportunities that you can explore? Yeah, it's interesting. I've done contract work in the past. The instability of it makes me nervous. and so I think if my back was against the wall and I was choosing, I'd probably take even an in-person part-time role locally in Chicago and keep searching for something more before I did contract work just to have some sort of stability and reliability along the way.

25:26Sean Pyles:It's easier to get a job when you already have a job. So if you have a chance to get in the door, that may well be your best chance to find something better. That's a really great point. I had not thought about that. I understand wanting to do your due diligence at this new job and really put in the effort, but you have to follow what's right for you in your career. So even if a month in, you get a job offer from somewhere else that is a much better fit, that's what's right for you. And I wouldn't feel guilty about leaving that new job. Thank you for saying that. That's really refreshing to hear, to be honest with you, because it's been something that's been weighing pretty heavy on me.

26:03And that has definitely created probably some undue stress in the process as I kind of do play out the what if.

26:12Sean Pyles:Maybe a bit of analysis paralysis. Yes, absolutely. I'm sure my friends are tired of it. Yeah. I'm glad you have a support network of friends to help you. My network personally and professionally is amazing. One of the things that I did early on was I did communicate with my close friends about what was happening and I kind of put it out there that like, if we're gonna hang out and do something that costs money, I can give you one day a week and I can give it$20. And that's what I have. So smart. And they, they're great. So I don't know why this surprised me, but they have been so supportive and aware when they invite me to things or it's just been really great along the way.

26:57Elizabeth Ayoola:I'm happy for you going through something like this and having a strong support network can really make it easier. And also it shows how financially savvy you are because it takes a lot of courage to tell people, this is what my budget is and I don't want to go over it. So good job to you. Oh, thank you. And that makes me want to pivot a little bit back to something you were talking about earlier, which is important when you're experiencing unemployment, which is COBRA versus marketplace insurance. So it sounds like you have a really good hold on your budget. So what were your questions around that?

27:27Elizabeth Ayoola:Are there any concerns that you have there? One silver lining in all of this is that my position was eliminated right at the beginning of the month. And so my insurance actually goes through the end of this month. So I'm covered on my existing plan right now. The COBRA is$971 a month. And just to kind of put that in context for me personally, my total monthly expenses without insurance is roughly$2 ,600. So$971 is a big thing for me to swallow. But I also did go into Marketplace and submit the application there. And it's saying that it has sent it to the state for consideration for Medicaid. And I'm just kind of in a holding pattern there.

28:16So I kind of feel like my hands might be tied and I might have to do the COBRA. That's kind of where I am right now.

28:22Sean Pyles:Have you been able to get quotes for how much marketplace insurance might cost you and what kind of coverage you would get? I haven't. I've tried to go in and do that, and it won't let me go any further until the state makes a decision about Medicaid. Well, considering that you had a high-paying job before, I would be a little surprised if you qualified for Medicaid. You might just have to be that squeaky wheel and start calling people because bureaucracy moves slowly. we know that state governments are having a pretty hard time right now you might be able to get through if you just call but you need that answer because that's really what's going to help you decide whether cobra or the marketplace is best for you in terms of the coverage that you personally need for anything that you might have on an ongoing basis and then what you can afford too because 900 something dollars is a huge hit to your budget especially when you're already going through your savings.

29:16Sean Pyles:But based on your income for the past few years, you might not end up saving a whole lot more if you go with a marketplace plan. Or you could probably find one that's more affordable, but it would have lesser degree of coverage for you. So again, it comes down to what kind of coverage you can get away with. You don't want to be sacrificing your health just to save a few hundred dollars because you can end up paying much more than that down the road if you neglect your health. I also want to go back to how you've been able to adjust your finances in general since this job loss. It seems like you are really good at communicating your boundaries with your friends around your budget.

29:50Sean Pyles:I love a$20 limit. The good thing about living in Chicago in these warmer months is that there's so much to do for free. I'm from Chicago originally, and I love how the city just comes alive in the summer with all these different street festivals that are free to get into. What other changes have you made to your finances since losing your job? I had mentioned, And I applied for unemployment immediately. I cut back immediately. Aside from my mortgage and my HOA fees, my biggest expense was travel and eating out. And neither of those are necessities. And so it was pretty easy to cut back. But I also knew myself that I get tempted to travel really easily because I love it so much.

30:32So one of the first things I did was I actually, to your point, Sean, made a list of lots of free and reduced cost things to do because I knew when that urge to travel came up, I was going to need to have something to replace it. So that list sits on my kitchen counter. So every time that urge comes up, I just go to the list. I'm like, oh, let's go to the dog park or oh, let's go check out this festival or those kinds of things. But then I also knew like it's a big swing to go from spending to nothing. And so one of the other things that I did was I created goals within my job search and decided ahead of time how I was going to reward myself for hitting each of those goals.

31:18And those earlier rewards are free. So like sleep an extra hour or paint your nails or, you know, just random stuff. And those goals that are closer to an actual offer are the ones where I have like spending attached to it. So like I have my eye on a new pair of tennis shoes that I really want or a pottery class, still very like low cost, but that way I have something to look forward to, but I don't feel completely constrained on the spending side of things. I love that.

31:51Sean Pyles:I love that you seem to be really good at building structure for yourself because that's so important too after a job loss because there can be a loss of a sense of purpose and your day to day is so open ended. So you are building infrastructure for yourself to have a full life by diverting your interest in travel into exploring your area around you and rewarding yourself for the progress that you are making. So I hope that you can take some time to appreciate that effort too, because it goes really far. And it's one of the best things to help you through a period like this.

32:23Elizabeth Ayoola:Thank you. All right, Bree. So do you have any other questions for us? Do you have any thoughts based on our conversation about what you might do next moving forward? This has just been so helpful. I'm wondering when I do land that next job, what's the fastest way to replenish what I used so that if something were to happen again, whether it's job loss or some other financial emergency, I can as quickly as possible be prepared for that? Well, my thoughts are swinging back into action. You will get a new job soon, fingers crossed. I don't know what kind of budgeting framework you do, but the 50-30-20 budgeting framework can be very helpful.

33:02Elizabeth Ayoola:That's what we recommend at NerdWallet. So, you know, 50 % goes to needs, 30 % goes to wants, and 20 % goes to debt and savings. So you can just do a direct deposit, you know, straight from your paycheck into your high yield savings account or wherever it is that you save your money and gradually build that up. So yeah, that's a way to approach it. If you have, you know, any toxic debt, again, 20 % can go towards that. As someone who had to tap a lot into her emergency savings last year, when I moved, I felt awful because I felt like I was failing or moving backwards because my emergency savings wasn't where I wanted it to be.

33:37Elizabeth Ayoola:It just can be a reminder to be kind to yourself and remember that's what the emergency savings is there for, to use it in the case of an emergency. So yeah, just gradually with time, build it back up. And before you know it, you'll be back in the spot that you want to be. Thank you.

33:50Sean Pyles:And it can help too to have a baseline understanding of where you have to get back to. So look at how much of your emergency savings you have spent from the time that you lost your job to when you get your next job. That's the number that you want to restore to and think, okay, how much given my budget, given your new salary, can you put away monthly comfortably? And then from that point, how long is it going to take you to get to that baseline? One last thing I wanted to touch on is your retirement. We haven't talked about what's happening with your retirement savings. So what is your plan there?

34:23Sean Pyles:Because I assume you have at least a little bit of a plan around your retirement savings, maybe from your previous employer's fund and what you might do next with it. Yeah. So this is actually part of the reason why that is like a no-no for me in terms of options and when I mentioned earlier about cashing out is because early in my career, as you all have mentioned, you make decisions that you learn from. And I did cash out a retirement account when I changed jobs. And now seeing how much I miss out on because of that choice, it's just like a hard no for me moving forward. And I also have been working really hard to make up that loss.

35:04So I still am not at the place where I need to be at my age to have the retirement that I want. The gap isn't so large that I'm freaking out about it anymore. Like it feels very doable and like I can do this. I can accomplish this in the time that I have. Okay.

35:21Sean Pyles:Well, that's helpful. So I think you're on the right track with having that be a hard no. It can be really tempting to pull from retirement and, you know, Maybe in four months, if your savings are getting depleted, that can be something to revisit. But in general, pulling this money out now can make it that much more difficult to get to where you need to be later on, like I mentioned before. So just something to keep in mind, too. And then later on, once you have a new job, that will open you up to exploring different ways to save retirement, whether it's through their 401k, 403b, your own Roth IRA.

35:58Sean Pyles:But getting that income stream started back up again will enable so much more when it comes to retirement savings. So that should be the number one priority.

36:04Elizabeth Ayoola:And also, I want to add, Bri, I don't know if you thought about what you want to do with that old retirement account from your former employer. But I don't know if you're aware of the options you have, which are typically rolling over the account into a new one, leaving it where it is with your current employer, or reviewing the investment fees on both accounts and seeing basically which one is cheaper and which one is the better option. And then it sounds like you're in a good spot in terms of, you know, your cadence for saving for retirement. But I will quickly say that some employers, if you have a balance, maybe a$5 ,000 or less will involuntarily cash out your account.

36:38Elizabeth Ayoola:That happened to me. So you aren't the only one who made a little, you know, retirement oopsie. So that happened to me once when I left the job and I thought it was free money and I spent it. So that is something you definitely don't want to do if you are going to cash out or if you do get a check in the mail. You want to make sure that you roll that over into an IRA, ideally. That makes a lot of sense. All my previous jobs, I did previously roll them all into one because it was getting too much to take care of. And I also have this assumption that that's a good choice because the larger the balance, the more compound interest over time, I think.

37:13But what are the pros of keeping it separated and not rolling it over?

37:17Sean Pyles:Keeping it there is easy. And if you're lazy, that's a nice thing to have. But it doesn't make a lot of difference one way or another in terms of compounding because the money is growing over time. So I understand wanting to have it all in one place. That can be the much simpler way to do things. And as you get closer to retirement, it's just going to be the easiest way to manage what you have saved up is to have it in one, two, maybe three places. But you don't want it to spread across five different employers over time. But like Elizabeth mentioned before, you want to review all of the investment options at different accounts, which is why a lot of people are fans of Roth IRAs and IRAs in general is because they tend to have more retirement investment options versus a 401k.

38:01Sean Pyles:But that also depends on your employer, too. I would say think about the fees, the investment options, how you like to manage your own money. You might be fine leaving the funds that you have in your former employer's retirement account there. although sometimes the employers may charge you higher fees because you are a former employer. So get that information too. But I think for now you're probably fine just doing what you like to do with your retirement funds. Yeah, absolutely. Well, Brie, we've run through so many different aspects of your finances, your life goals, the way you strategize and organize your own life.

38:38Sean Pyles:How are you feeling now and what do you think your next steps will be? I feel really good. I've had confidence all along on the job search side of things, especially considering I'm finding so many jobs that are in alignment. But definitely the financial side has been just this quiet chirping in the background that is getting louder and louder the more time that passes. And so this has been really good to just touch base and have some reminders for myself. Well, it seems like you're doing all the right things. Please keep us updated on how everything goes for you. We can't wait to hear from you.

39:11Thank you so much, Sean and Elizabeth. I appreciate it.

39:13Sean Pyles:Thank you. And that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.

39:32Elizabeth Ayoola:Come back on Thursday to hear the latest financial news and what it means for your bottom line. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes. And if you're listening to us on Spotify, leave us a comment right on the platform to let us know what you thought of this episode.

39:52Sean Pyles:Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Hilary Georgie, who also helped with editing. Nick Karisimi mixed our audio and a big thank you to NerdWallet's editors for all their help.

40:12Elizabeth Ayoola:And with that said until next time, turn to the nerds.

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