4 things I did wrong with my money when I was laid off for the first time

Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.

• When I was laid off in 2015, I panicked and neglected to be strategic with my money.
• Looking back, I should have established a budget and opened up additional income streams.
• I should also have opened a 0% APR credit card and created a strategy for when I had money again.

The day I was laid-off from my full-time job as a copywriter at a tech startup in 2015, I came home and I panicked.

I had spent six years in the workforce, at back-to-back jobs, without ever being unemployed. I had relied on my salary to pay for my expenses, rent, and recurring bills, hardly saving more than a couple hundred dollars a month.

I wasn’t sure how long it was going to take to find a new job, and all I could think about was how this career setback was going to drive me into debt.

Years later, I look back at that experience as a financial wakeup call. I was able to learn from all of my money mishaps, like not having an emergency fund, or even additional sources of income. But during that time, I made plenty of mistakes. Here are the main things I did wrong with my finances when I was laid off.

1. Failed to follow a budget

When I got laid off, I was given severance payments for four weeks. Instead of panic-spending that money on my rent and miscellaneous expenses, I wish I had been smarter with how I spent that incoming final paycheck.

First, I would have tried to negotiate my bills by calling my landlord, internet provider, and credit card company to see if I could defer payment for a month or two without penalty. I wish I’d audited my spending by looking over every credit card transaction and immediately ended recurring subscriptions I couldn’t pay for, like streaming services and cable.

I would have carefully created a strict budget for extra spending around groceries and activities, whether outings with friends or networking opportunities that required a paid ticket. In an effort to make sure I was keeping up with that budget, I’d sit down every night and track all of my spending.

I’d put any extra cash in a high-yield savings account so it could earn money and potentially be used for future months where I needed a boost of money to pay for fixed expenses.

2. Ignored additional income streams

It took me a few months to start earning income again. I did this not through a new job, but by starting my own company. What I wish I’d done, during the months where I didn’t have any pay, was start introducing new income streams.

I could have immediately put up profiles on freelancing websites, like Upwork or Fiverr, where people could have hired me to be a copywriter for projects. I could have also invested in low-cost side hustles that have the opportunity to generate passive income, like selling a copywriting course or e-book.

Years later, I have over five streams of income that bring in money every month, from selling courses, to freelancing, and making affiliate income through social media and my newsletter. That way, if I lose clients from my business, I still have money coming in to support my financial obligations and goals.

3. Stuck with a high-interest credit card

During the early months of getting laid off, I had to put most of my purchases on a credit card with an 18% interest rate. Since I couldn’t make my monthly payments, I was starting to accumulate debt at a high interest rate.

What I wish I did instead, was open a 0% APR credit card. My card offered that rate for at 12 months, so I could put essential items on my credit card and pay them off, interest-free, later in the year.

4. Overlooked the details of my money

Right after I got laid off, my first thought was how do I make more money fast. I didn’t sit down and look over my financial portfolio and I didn’t have any strategy with my money. If I had, I would have realized a lot of big money mistakes sooner.

For example, I was typically spending more money than I was making, which impacted how much I had in savings, didn’t allow me to have an emergency savings fund, and kept me in a revolving cycle of credit card debt.

If I had looked at my finances from a holistic standpoint, I would have been able to determine changes to make once I started earning income again, so I’d never be in that desperate financial state.