How Fearing Layoffs Affects Our Financial Decisions

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One question Mr. FAF has been asking me almost every day recently is “What would happen if I got laid off/fired?”

Mr. FAF started working full-time in early September after spending six years in a doctoral program.

He works at as a software engineer at a tech giant in the DC area.

Although Mr. FAF enjoys his work, things have not been smooth sailing.

He went through a three-month training and got to know his teammates, all of whom are talented and hard-working individuals.

Working with smart people can be motivating, but it can also make you feel like you are not good enough.

And that’s exactly what Mr. FAF has been feeling lately.

He has done nothing that would trigger a performance review or see even a hint that he would be let go.

Yet, fear somehow manages to occupy his thoughts every day.

Previously, to reward himself for the new job offer and fulfill his dream, Mr. FAF bought an Oclyft system and a high-speed desktop.

He had been dreaming about playing video games in 3D for years.

That dream cost us $1,000.

I would not have spent even one cent on that expensive toy. But it was Mr. FAF’s wish, and I wanted to respect that.

Owning a $1,000 entertainment system, however, has not assuaged his fear of being let go from his job.

In the end, he returned the whole system for a full refund.

He can definitely try to apply for another job, but getting laid off, I think, would be such a blow to his ego as an employee, a father, and a husband that he can’t keep his mind off of.

And it’s understandable since he prides himself on being the breadwinner in our family.

Every time I hear Mr. FAF ask what we would do if he lost his job, I would feel like there’s a blow to my stomach. What would we do exactly?


We have our emergency fund in place that can cover three months of our expenses. I would continue to work to pay the mortgage and put food on the table. We would stop eating out and start eating at home all the time.

We might take Baby FAF out of daycare and let him stay at home with Mr. FAF to save money. When Mr. FAF does have job interviews, we will put him in a short-term daycare near our house for an hour or so.

In a nutshell, we would be more careful with out spending and try to save more.

To comfort Mr. FAF, I always tell him, “If you lose your job, I will be the breadwinner and make money for our family.” I usually say that with such certainty that Mr. FAF won’t ask any more questions. But deep down, I also have a fear I rarely tell Mr. FAF about: the fear of losing my own job.

What if both of us lost our job and spend all of our emergency fund before we find new employment? I haven’t done anything at work that warrants a layoff.

But the truth of the matter is that sometimes (or most of the times), my employment is not determined only by my performance. It also depends on a variety of factors which are beyond the control of both my employer and myself: a market downturn, restructuring, downsizing, budget cuts, etc.

In short, we can never be 100% sure of our employment. Sometimes I blurt out that I too fear a job loss. Mr. FAF and I then just look at each other without saying a word.

I then break the awkward silence by saying that it is indeed beyond our control. The only thing we can do is try to work hard everyday and get stuff done. If our employers decide to let us go, they must have considered that decision carefully, and there’s not much we can do about it.

Mr. FAF and I then carry on our daily lives until the next day when we come home from work and wonder again what if we get laid off. It is certainly not a pleasant feeling.

Mr. FAF hasn’t seen any of his colleagues being laid off yet. But I have seen mine leaving. Every time that happened, I felt sad and scared.

I was sad because someone I used to work with would no longer be in the same office as I am, and scared because I feared that would happen to me one day. So sudden yet so predictable.

Before I started working, we were afraid that I couldn’t find a job. Before Mr. FAF got a job offer, we were afraid that he couldn’t find a job. And how that both of us are employed, both of us are afraid that we will lose our jobs.

The importance of having a job

Having a job has become such an important part of our every day life, worries, and thoughts simply because it’s directly linked to our finances and standards of living.

Having a job means we can pay the mortgage, put food on the table, have clean and warm clothes, buy gas for our car, have electricity for our lights and stove, and get water for drinking and showering.

A job equates an income, and an income equates money. We all need money to live a normal life. I have heard of stories about some people who live on a barter system. But I’m not sure if I want to do that. I prefer a more exchangeable form of currency: money.


The constant fear of losing our jobs has helped me realized five things:

1. Mr. FAF and I can’t never be 100% reliant on our active income. We can be employed one day but be unemployed the very next day. It is not our employers’ duty to worry about our standards of living and finances, and we totally get that.

What we need to do is work hard and be proactive at work to show our value and prove our capabilities. Unless we are indispensable to our employers, they have every reason to let us go.

2. At the same time, we need to be on the lookout for new opportunities. We want to stay loyal to our companies and help them grow. But if they can’t keep us for whatever reason, we at least have other doors open for us.

3. We need to keep saving despite a 128% increase in our income. He told me he wants to replace his slow $200 Honor phone with an Iphone.

I gave him the OK since it’s something he’s been dreaming about ever since we started dating. Plus, I don’t want to be a control freak, especially when we’re not financially better-off than before.

And most importantly, I wanted to enable Mr. FAF to think independently and seriously about whether it’s a necessary purchase. As I predicted, right after I approved the purchase, Mr. FAF balked and said “What if they fire me right after I buy the Iphone?”

We started joking about how his employer would feel sorry for us and give us some instant noodles from the office kitchen to help us get by for a meal. I know it sounds like a terrible joke. But at that time, the joke was the best way for us to manage the fear that was gnawing away at our bliss every single day.

4. We need to have multiple streams of income besides our jobs. Ideally, it would be passive income so that we can spend time outside of work with family and pursue our passion projects that might not generate any income.

However, I realized that even when it comes to passive income, we need to accumulate a certain amount of money to make it happen.

Whether it’s rental income, investing in stocks and bonds, or blogging, we need to work hard to build enough wealth or spend an enormous amount of time to build our blog.

Nothing in life comes easily. We just can’t expect to do nothing throughout our lives and have money falling into our laps. That will never happen unless we have rich parents, which we don’t.

5. We need to reach financial freedom as soon as possible to alleviate the financial concerns that weigh on us every day. We are still not sure if we want to quit our jobs when we have the option to retire early.

But knowing that we will still be financially secure even if we lose our jobs is such a powerful feeling that can forever put our minds at ease. And we can only do that through constant saving, increased income, and wise investment.


I am writing up this post right before Christmas. While excited about the new year, the fear of unemployment lingers in our thoughts every day.

Sometimes it surfaces and prompts Mr. FAF and me to make lame jokes to mask our fears. Sometimes it makes us feel moody about an uncertain future although many people might think that we seem to have it all.

Fortunately, in most cases, it drives us to be more aggressive about securing our finances and building our wealth.

Fear can be debilitating. It can stir up unpredictable emotions and prompt us to make irrational decision such as going on a shopping spree before we can no longer do so.

Fear is real, and sometimes we just can’t deny the fact that it occupies our thoughts. But Mr. FAF and I try every day to turn it into a positive source of motivation to work towards a financially secure future and retirement.

And that’s something we can do. Happily.


How Mr. FAF and I Handle Our Finances As A Couple

10 Simple Things We Do To Save Money

5 Things We No Longer Do To Save Money

Hubby Decided Not To Be Cheap – Our $1,400 YOLO Trip

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24 thoughts on “How Fearing Layoffs Affects Our Financial Decisions”

  • I’m always confused when people are so happy go lucky with their money and spending. Isn’t there a little voice in their head that goes…”you’ll regret this later when you’re 2 months behind on bills…”
    At least you guys are a dual income family so it’s twice the security and double $$ making power. Plus Amazon puts you on improvement plan, give you a year to improve and if you don’t, just request a team change or different manager to delay the firing.

    • Me too! IMaybe they have lots of savings or rich parents or sth. @_@ We have a performance review and improvement plan where I work too. But usually people just get laid off all of a sudden. >_<

  • That’s one of the reasons we love that our spending is so low (always <30k). In case one of us (or both of us) loses their job, we won't have to change our lifestyle by all that much.

    • <30k is awesome! Our mortgage payment and daycare are the major expenses in our monthly spending. Can't wait until our kids go to public school for free hehe.

  • An exercise I’ve felt helpful in calming the “what if I get laid off” worries: 1. Check out my employer’s default severance package. For larger companies with highly paid employees, it tends to be pretty generous. 2. Look up how much unemployment I’d be able to collect in case of job loss. 3. Calculate how long I’d be able to survive on severance+unemployment. This is the runway for finding a new job.

    I’ve found, adding up the above, I’d probably be able to go about eight months to a year between jobs without cutting my spending and not even touching my emergency fund. That’s a good amount of time to find new work and helps ease my worries.

    • I think you have a great plan. 8 months to a year without having to cut your spending or using your emergency fund is amazing! Thanks for the tip 🙂

  • It’s encouraging for me to know that if Kristin lost her job (which honestly could happen just because of the industry she’s currently in and where I see that going in the next 5-10 years), we could live off my income. Our savings goals would be shot for a while, but we’d be fine.

    If I got laid off, we could stretch our emergency fund to probably a year or more when combined with Kristin’s income. If we stopped saving in 401(k) and such we could live nearly indefinitely that way, but it’d be tight and not enjoyable.

    That’s definitely encouraging. If we both get laid off at the same time then we’ll be in a tough position. This is where income diversification is appealing. I am not a HUGE side hustle fanatic, but I do see the merits in it and am exploring that this year.

    Whether it’s passive or not doesn’t really concern me at this point.

    In the meantime that extra $$ will just go toward the mortgage or investing.

    • “In the meantime that extra $$ will just go toward the mortgage or investing.”

      Same for us! Besides 401(k), we’re trying to pay off our mortgage. We definitely need to beef up our emergency fund. With the stock market soaring, I’m afraid it will just plummet one day and take us with it @_@

  • All I can say is do not rush things. It’s so easy to be pressured especially when you read other people’s success stories. Fear not and be thankful for what you have. Like my dad use to tell us when were kids, everything always falls into place and everything happens for a reason. As we grow older we gain more experience which makes us more marketable in the job market.

    • Thank you, Bernz! You’re right. The pressure is there. Your dad’s advice sounds great. I’ll keep that in mind 🙂

  • Some jobs are more unstable by nature. But the big tech companies seem to be doing very well currently! I’ve never heard of any of my friends there being laid off. I have the opposite situation where I’ve accepted a lower paying job but with job security (tenure). Assuming I make it past tenure, I can’t be let go. Although I sometimes wish I was working up in industry in the Bay Area making twice the money, my job security is worth something, although it’s hard to quantify how much.

    • Job security is definitely valuable. It can come at a cost, but I really think it also depends on our preference and risk tolerance. Congrats on the new job!

  • You need to beef up your emergency fund if your jobs are not super stable. If the stock market crashes, the economy will follow. For Mr. FAF, I suggest getting into the core business of his company. That’s the most secure position you can get. Avoid little labs, support team, and research branches. Those are the first jobs to go. Good luck!

    • You always offer such great advice, Joe! We will increase our emergency fund. I’ll tell Mr. FAF about your core business advice too. 🙂

  • I’ve always seen the multiple streams of income as a way to bolster up an emergency fund. In essence, if you have a side hustle that you know you can make money with – even a simple side hustle like Uber or something, it means that, worst case, you’ll have a job that can make you some money to tide you over. Those extra income streams can basically act as a secondary emergency fund, if that makes sense.

    • It does! I totally agree that we need more streams of income in case we lose our jobs. I’ve been following your side hustle reports. Very inspirational! 🙂

  • I think about this from time to time, and have calculated we scrape by on one income, if need be. I was looking at a $4,500 apartment rental the other day, but then I came back to earth, remembering that living below our means is the better way to go.

    • New York is an expensive place to live! I’m glad you have a solid plan B. Yes on living below our means! 🙂

  • I’m sorry you’re experiencing this anxiety. I’ve had similar worries about my husband’s employment. Since we got married, he had a career change that required going back to school, and then a job change within the new field. He actually jumped to a lower-paying job because higher-ups were quitting in droves, and he saw the writing on the wall. His coping strategy was to scan job postings frequently and apply broadly. My coping strategy was to build an extra-big emergency fund. So far the new job is working out well.

  • If there is one thing that I have learnt from all these years of being a software engineer, it is this – It is sad, but good software engineers are really rare. Anyone who is half way good will not have any difficulty finding a new job. May not be the best job ever, but you will not starve.
    And his employer is not looking for a way to lay him off. They are thinking of what they should do to keep him there. It is all in your heads.

  • Hopefully this subsides with time, and when you continue to grow your nest egg.

    My Dad graduated during recession, and nobody was hiring. When he did fine a job, it was travelling 2+ weeks every single month. That time he was counting, and keeping track of every single penny, raising us, all the while on a single income.

    If you continue doing what you’re doing, you’ll end up like my Dad where there comes a day where you don’t have to think about where money is going and save 50+% of it.

  • Being FI frees up the stress of those deep-down thoughts of job loss. It’s like a magic key to a lower stress life. You guys are doing all the right things to get there and when you do, you’ll find that the stress of these things is mostly gone.

  • Networking is very important but it takes effort. Expand your circle of professional colleagues. The best jobs are through connections. You know someone who knows someone who gets you a job. I never realized the importance until I read the book How to be a Power Connector by Judy Robinett.
    Also constantly learn new job skills (preferably on the job so you get paid for it) so if you ever have to leave, you can list those skills and be more attractive.
    Try to consult or moonlight on the side. A CS PhD should have some skills he can use to hustle on the side – maybe take side projects, etc.
    Finally, don’t worry or stress about what you can’t control . It does you no good.

  • You live in DC so it’s a little safer during a recession… Your husband should be able to get a government contractor​ job with his skill set and education. The area really boomed after 2008, with a lot of people moving here to get work, since government was still hiring when other sectors were not. Just something to keep in mind 🙂

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