How to make money after a lay-off

Coronavirus pandemic is a sledgehammer for the US economy, which was deemed overdue for a recession by multiple economic pundits. Small businesses have laid off staff because their income diminished overnight due to mandatory quarantine for 80 million Americans. Financial analysts are forecasting an unemployment rate of up to 20%, which bears signs of sensationalism, just between us. It is likely that the US will lift quarantine in 2-3 months and economic recovery will begin. The question is what should you do if you were laid off, to survive the next 6 months until recovery picks up steam and jobs will be readily available. In this post, we will go over income sources to support your family between full-time jobs.

France Chocolates Closed during Coronavirus pandemic

Severance package

There is no law requiring businesses to pay a severance package, but some of them do. Some companies even use severance package as a leverage to have you sign a release form. It precludes you from filing a lawsuit against them in the future. Contact your HR or benefits administrator to clarify the following aspects:

  1. The number of weeks of pay you get and the date of the first and the last paycheck.
  2. Whether you continue to receive health coverage from your former employer and the date this coverage lapses.
  3. Possibility of you cashing-in your unused vacation, sick time or any other benefit.
  4. Any pending expense reimbursements, tuition benefits payments or anything else “in-flight” at the time of lay-off.

This information will be necessary for you to estimate how long you’ll last without a steady income stream.

How much money do you need?

A conventional financial advisor would say that you need a pile of cash to last 6 months without income. That’s easier said than done, especially after lay off. To last that much time you either need to make more or spend less. Your sole goal should be to amass cash, so stop investing, including retirement, until you’ve built a buffer.

Discretionary spendings

On the day of lay off, cancel all subscriptions and services that do not directly contribute to sustaining the life of your family. I do not mean the lifestyle, I mean biological life. All of this should go:

  • Entertainment services (Netflix, Disney+, Apple TV+, Hulu, Spotify, Adobe Creative Cloud, etc.)
  • Non-essential subscriptions automatically billed to your credit card monthly or annually (Amazon Prime, Office 365, Coffee deliver, etc.)
  • Magazines (Really? Is anyone still reading them?)
  • Kid’s activities (Karate class, swimming school)
  • Restaurants, nights out, Uber rides, coffee shops (yep, Starbucks goes)
  • Travel, including that vacation you just paid for

It will be uncomfortable but you can do it.

Necessary spendings

Out of things you absolutely must have to exist, consider reducing the amount:

  • Mortgage – refinance into “Interest-Only Mortgage” to reduce monthly obligation. You won’t be paying your house off but you aren’t losing it either. You can always refinance at a later time when you find a job.
  • Are you renting? Consider downsizing the month you got laid off. Since you no longer have to be in a specific area for convenient commute, it may be worth moving into a cheaper neighborhood for now.
  • Are kids going to a private school? Consider free public education.
  • Reduce your water, electricity, gas and sewer consumption.
  • Internet and cell phone are really necessities these days, but you can switch to a cheaper plan or a different carrier for a promotional period at a lower price. Comcast is big on two-year promotional pricing, but you have to be picky what you sign up for.
  • Do you really need two cars with car loans? Average American is spending $450 on a car loan – that’s something you could use right now at the cost of the inconvenience of sharing a car with your spouse.
  • Shoot to reduce your grocery expenses in half by cooking at home and refrigerating leftovers.

The quicker you take draconian actions the longer you will last with your savings. If you take a few months to make all adjustments then you’d be spending more than you have to during those few months. Once things get better, you can recover your lifestyle as quickly.

Unemployment benefits

It should be your first go-to place to generate an income stream. The rules vary state-by-state, but typically you should be able to produce anywhere between $100 and $800 per week, depending on your prior income. You can collect them for up to 26 weeks. These benefits are available to you as long as you are actively searching for work. As such, it can’t be the beginning of a happy retirement.

Needless to say, you must be a US citizen or a Green Card holder to be eligible for benefits. Unfortunately, H-1B will not qualify. Also keep in mind, as a Green Card holder, you should consider the implications for your naturalization process. Of course, laws and policies can change, but as of today, tapping into unemployment benefits will be a negative mark on your naturalization application. An adjudicator may consider you to be incapable of supporting yourself in the US and your naturalization application may be denied. Talk to a lawyer.

Economic stimulus

The government is hard at work negotiating a $2 trillion dollar economic relief package for American citizens and businesses. At the time of writing this post, it hasn’t passed yet, but it is very likely to pass. If it does, every American making less than $75K/year will get a one-time check in the mail for about $1000. All this data is preliminary since the bill hasn’t passed yet. When it does, this should help keep your family afloat for a bit, if you are one of the people laid off because of business closures due to mandatory shelter-in-place orders.

Don’t rush to pay your taxes either. IRS extended the deadline to July 15. There are likely local government actions, similar to the one in the city of Bellevue, deferring local business tax payments until they can generate money.

Hustle

This is akin to starting a business, but I didn’t want to scare you off with a bold title. There is a man in Seattle who helps people park on the streets for free or at competitive parking spots for less money. He doesn’t charge a fee but asks people for a tip. I ran into this man once and he saved me $60 by guiding to a free street parking and explaining the time window I had. He even jumped onto a busy street to stop the traffic for me to pull out of the driveway. Of course, I tipped him a portion of my savings and he shared a story. He said he’d been doing it for over a decade making about $45K a year. Is this a business? I think it is. I do not know if he runs an LLC of S-corp but his hustle is clearly profitable. Perhaps there is something you could do in your city or state that doesn’t require you to sell your time to someone else. This should be your second stop in generating revenue.

Cleaning

According to ZipRecruiter data, help wanted ads for cleaning services have surged since Coronavirus outbreak. It is the definition of dirty work, but perhaps it could put a few meals on the table.

Gardening

If you are blessed to live in the state where grass and bushes grow fast – you are in luck. If you have a truck, lawnmower, and a rake, you have everything you need to offer gardening services. There are a few cheapskates that still mow their own lawn, but most will pay someone else to save their time.

According to thubtack.com, the average gardener rakes up to $100 per gig.

Gig economy

We live in a time when the internet is ubiquitous and both buyers and sellers, employers and employees can meet in designated locations to exchange goods or services for money. These locations are:

  • Upwork.com – I have hired freelancers on this site and was satisfied with their results. You can sign-up and bid on various projects. If you win the bid and deliver – you can make money without leaving your house. This site is good for engineering positions, creative work, sales or marketing, data science, and writing.
  • Fiverr.com is another hot and trendy place to offer your services. This site is more popular for creative work – design, photo and video editing, social media promoters.
  • TaskRabbit.com is a great place to offer handyman services. You can build furniture, run errands for people, deliver goods or clean their houses.
  • Thumbtack.com is another place to offer your dog sitting/pet walking services, catering, fitness training, and other general contractor services.
Handyman working in the garage

Delivery

Logistics deserves its own section. As people hunker down in their homes for a Coronavirus outbreak, they heavily depend on deliveries of goods they can’t purchase themselves. This is also true for restaurant take-out orders that don’t serve any other way.

Grocery store

This doesn’t sound too exciting, but there aren’t any “dirty” jobs when food on the table is at stake. In the wake of Coronavirus outbreak, large retailers like Wallmart, Safeway and CVS are hiring neatly half a million people. These jobs aren’t going to be permanent, but so as the economic downturn. Why not take a side gig and make a few bucks while demand is high?

Become a teacher

Before you got laid off you were good at something. Use that knowledge to make money while you’re looking for a new job.

  • Tutor.com – teach people online about math, science, English or business. There are plenty of students from overseas who would be happy to speak English without an accent – you could help them, for a small fee. There are a lot of other tutoring web sites to explore.
  • Apply for a teacher position at a local school via indeed.com or ziprecruiter.com.
  • Become a teacher online at Outschool.com.
  • PeaceCorps is a great volunteer program for people in between jobs looking for a fresh perspective. They ship you abroad and pay a stipend to match the lifestyle of the local population. This isn’t much, but you will live. Meeting a peace corp volunteer was a powerful experience in my highschool. Perhaps you will make a lasting impact on some other child’s life.

Join non-profit fighting the virus

Bill and Melinda Gates Foundation is engaged with multiple partners to curtail the spread of the virus. They have a few openings in the Seattle office that are directly related to the pandemic. If you lost your job because of this virus, you can fight back hard.

Tech job at video conferencing company

Since most people are on lockdown across multiple countries in the world, the demand for video conferencing services has surged drastically. Zoom, Slack and Microsoft Teams are barely keeping up with demand. According to internal ZipRecruiter data, while most industries are seeing a decline in job posts, tech companies are seeing a temporary surge. You could be one of the people helping companies connect the rest of the population peer-to-peer or with online services.

Become a craftsman

If you are gifted craftsman and can make valuable products with your hands using wood, glass, metal or fabric, it may be a good idea to open a shop on Etsy.com. There will be a ramp-up time as you need to build-up inventory, advertise it and get a few customers with stellar feedback. However, it doesn’t have to be a primary source of income. It can be complementary with intent to turn into primary over time.

Online surveys

This is not the most glorious or rewarding job on the planet, but it will create cash flow when no other cash is flowing, so to speak. Here’s a list of top web sites paying cash for taking surveys. You can make between $3 and $5 per survey. Take note of the NerdWallet’s evaluation of these websites.

Affiliate marketing

If you had a good reputation and a loyal band of followers on social media, time to cash-in with affiliate marketing. You get paid when your followers click links on your posts and buy products.

If you do not have a fan base yet, you can start building one on YouTube. People claim it takes about 2 to 3 years and at least 50 videos to see any reasonable fruits of your work. Clearly this is not something that can generate money quickly if you are laid off. Consider this as a long term investment and do it side by side with another income from the list above.