If you’ve recently lost a job—or are supporting someone who has—you’re not alone. It’s a moment that can feel disorienting, vulnerable, and even surreal. In my Mindful Money Practice, I’ve walked alongside many clients as they navigated this exact situation. I have also been there myself. And while the path forward may feel uncertain, there are practical, supportive steps you can take to regain clarity and control.
You have probably heard the rule of thumb for your emergency fund is 3 to 6 months’ expenses. Sounds good, but what does that really mean? How do you calculate it? You’ll want to start by creating your Monthly Emergency Budget.
💡 What Is an Emergency Budget—and Why It Matters
An emergency budget is a simplified spending plan designed to help you stretch your resources while prioritizing what matters most. It’s not about deprivation—it’s about intention. There is no one way to do this exercise. Your life and your priorities are unique, but ultimately you will want to reduce expenses as much as possible.
An Emergency Budget:
- ✅ Focuses on essential expenses only (housing, food, insurance, minimum debt payments)
- ✅ Helps reduce financial anxiety by creating structure
- ✅ Gives you breathing room while you explore next steps
🛠️ How to Create Your Emergency Budget (Step-by-Step)
1. List all your current monthly expenses
Open your bank and credit card statements from the last 1–2 months. Write down every recurring expense—rent, groceries, subscriptions, utilities, etc.
2. Categorize each expense as “Essential” or “Non-Essential”
Ask yourself: Do I need this to live safely and function day-to-day? Essentials typically include:
- Rent or mortgage
- Utilities (electricity, water, internet)
- Groceries and basic household supplies
- Health insurance or medical costs
- Minimum debt payments
- Transportation (gas, transit pass, car insurance)
3. Trim or pause non-essential spending
This might include:
- Streaming services
- Gym memberships
- Dining out or takeout
- Clothing and accessories
- Subscriptions or apps you rarely use
4. Prioritize cash flow and flexibility
- Delay large purchases
- Call all your debt lenders – student loans, credit card debt, personal loans, medical debt. See if they have hardship programs, if you can skip payments without penalty, or pay interest only.
- If possible, build a small buffer for unexpected costs
5. Revisit and revise weekly
Your emergency budget isn’t set in stone. Check in with it weekly and adjust as needed. Even small shifts can make a big difference.
🌱 What to Do After Job Loss (Beyond the Budget)
- 🧾 Apply for unemployment benefits and review health insurance options. Compare COBRA to shopping for health insurance on the open market (varies by state).
- 🧑💻 Explore part-time, freelance, or bridge work. Don’t be afraid to get creative–that’s how I ended up starting my practice!
- 🧘♀️ Create a daily routine to support emotional and mental health
- 🌱 Avoid taking money out of retirement before exploring other options
- 💡Consider having a garage sale or selling things online you don’t need for extra cash
💬 Final Note
ob loss can come with some complicated feelings. I experienced shame and loss of identity when I went through it. It was hard for me to ask for help, and I didn’t have a financial plan in place. I ended up spending my severance much faster than I would have preferred. I hope this newsletter helps you become prepared so you don’t have to go through some of what I did. My suggestion is to do this exercise in order to be prepared in the future, even if it doesn’t seem like you need it at the moment. Clarity brings peace of mind.
If you’re in this transition, I see you. Wishing you healing and success on your financial wellness journey.