For some U.S. workers, the fear of layoffs is looming.
In January, U.S. employers announced 108,435 layoffs, an 118% increase from the same period a year ago, according to outplacement firm Challenger, Gray & Christmas. It was also the highest amount for any January since 2009, the tail end of the Great Recession. A month later, nonfarm payrolls fell by 92,000, per the Bureau of Labor Statistics. It was the third time in five months that the economy lost jobs.
This comes as about 72% of Americans rate the U.S. economy as “fair” or “poor,” a January poll of over 8,500 U.S. adults by Pew Research found.Â
If you’re worried about being laid off, preparing your finances in advance could put you in a better position to handle the sudden shock to your income.
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Resources to tap when you’re worried about layoffsMake an emergency budget
Having a budget can be essential even when you have a job. But it’s even more important when you don’t have an income.
“What I try to do with my clients before any of this actually happens is I have them create an emergency budget,” said Melissa Cox, a Certified Financial Planner and founder of Future-Focused Wealth, a wealth strategy firm based in Dallas, Texas. As her clients prepare a standard budget, they also create a bare-bones budget that would be implemented in the event of a job loss.
This often involves deciding which spending is essential and which can be slashed. “It shows them how to do things when they’re not panicking,” she said.
Keeping emotional spending in check is another crucial role of a budget. “The first thing that people will try to do is maintain their lifestyle or even spend a little bit more on emotional spending,” she said. “Spending sometimes fills that void that we have.”
While using a spreadsheet is a good way to start making a budget, it can fall short in helping you build consistency. Using a budgeting app, like Monarch or PocketGuard, can connect to your accounts to help you track your spending and keep an eye on your progress once you’ve made your budget.
Monarch Cost
$8.33/month (billed $99.99 annually); $14.99/month (billed monthly) – get 50% off your first year with code CNBC50
Free trial
7-day free trial is available before subscribing
Standout features
Net worth tracker, investment portfolio tracking, goal creation and progress tracking, budgeting and expense tracking
Categorizes your expenses
Yes, but users can modify
Links to accounts
Yes, bank and credit cards, as well as IRAs, 401(k)s, mortgages and loans
Availability
Offered in both the App Store (for iOS) and on Google Play (for Android); web version also offered
Security features
Utilizes industry-leading security practices, according to Monarch’s website
ProsEasy-to-navigate money-tracking dashboard, including a net-worth trackerEasily syncs to your bank, credit cards and other financial accountsUsers can add collaborators for freeSeven-day free trialCons Subscription is pricier than competitorsRecommendations in the “advice” tab are genericPocketGuard
Information about PocketGuard has been collected independently by CNBC Select and has not been reviewed or provided by PocketGuard prior to publication.
Cost
Basic PocketGuard plan is free, while PocketGuard Premium subscription is $12.99 per month or $74.99 annually. Lifetime membership offer available at a reduced rate.
Standout features
In My Pocket feature uses your income, recurring expenses and savings goals to determine how much you have for everyday spending.
Categorizes your expenses
Yes, but users can customize
Links to accounts
Yes, users can connect accounts through Plaid and Finicity to import data automatically or manually add cash accounts for tracking
Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
Security features
PocketGuard utilizes bank-level encryption, PINs and biometrics like Touch ID and Face ID
Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
ProsIncludes bill payment tracker and bill negotiation serviceLifetime membership option offers additional savingsA+ from Better Business Bureau ConsBasic free plan only allows two budget categoriesTransactions may be categorized incorrectlyStart saving what you can — even if it’s small
Having an emergency fund you can tap if you lose your income can give you more financial options. The best way to start is by putting aside some cash now, even if it’s just a little bit.
“Make a priority of saving $50 a week, $25 a week, whatever it might be,” Cox said. “The funny thing about watching people save like that is it often shifts their mindset: When they see the money piling up, they want to do more.”
Automating your deposits can make saving easy and consistent. Additionally, Cox recommends keeping your emergency fund in “something that is accessible, cash or cash-like.”
A high-yield savings account can be an ideal place since the cash you’re saving earns more than a standard savings account but can be easily accessed if the unexpected happens.
CNBC Select’s favorite high-yield savings accounts are the Marcus by Goldman Sachs® High-Yield Online Savings Account and the CIT Bank Platinum Savings Account, both of which stand out for their high rates and lack of monthly maintenance fees.
Marcus by Goldman Sachs High Yield Online Savings
Goldman Sachs Bank USA is a Member FDIC.
Annual Percentage Yield (APY)Minimum balanceMonthly feeMaximum transactions
At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account
Excessive transactions feeOverdraft feeOffer checking account?Offer ATM card?ProsStrong APYNo minimum balance or depositNo monthly feesNo limit on withdrawals or transfersEasy-to-use mobile banking appOffers no-fee personal loansConsHigher APYs offered elsewhereNo option to add a checking accountNo ATM accessCIT Bank Platinum Savings Account
CIT Bank is a division of First-Citizens Bank & Trust Company, a Member FDIC.
Annual Percentage Yield (APY)
3.75% APY on balances of $5,000 or more
Minimum balanceMonthly feeMaximum transactions
No limit – Max currently paused
Excessive transactions feeOverdraft feeOffer checking account?Offer ATM card?
Yes, if have a CIT Bank checking account
ProsStrong APYMinimum deposit required is lowNo monthly feesNo overdraft feeOption to add a checking account with ATM accessConsOnly earn high APY on balances of $5,000 or more$100 minimum depositExcessive transactions feeNo physical branch locations
For complete list of account details and fees, see our Personal Account disclosures.
*Platinum Savings is a tiered interest rate account. Interest is paid on the entire account balance based on the interest rate and APY in effect that day for the balance tier associated with the end-of-day account balance. *APYs — Annual Percentage Yields are accurate as of January 9, 2026: 0.25% APY on balances of $0.01 to $4,999.99; 3.75% APY on balances of $5,000.00 or more. Interest Rates for the Platinum Savings account are variable and may change at any time without notice. The minimum to open a Platinum Savings account is $100.
Learn how to negotiate a severance, and plan how to use it wisely
If severance packages are common in your field, you may not have to accept the first offer you’re given. Negotiating your severance package is possible, and learning your options in advance could help you if layoffs occur.
Citing a strong performance record or a long tenure could give you some leverage, according to the University of Miami’s Toppel Career Center. You may be able to negotiate any severance pay and whether it’s paid in a lump sum or as a continuation of your salary, as well as payouts of unused time off and even 401(k) vesting. Since healthcare is often tied to your employment, you may be able to negotiate a coverage extension beyond what’s offered.
Once you negotiate your exit package, use your severance to the best of your ability. “If you are somebody that can go down to more of an emergency-type budget and save some of that money, it could very well set you up,” Cox said.
You should also consider the tax implications, Cox advised. “Working with somebody who does taxes can help you figure out how you can potentially shift some of that money into retirement accounts so you can reduce some of the taxes.”
Things like traditional IRAs can reduce your adjusted gross annual income, which could help you get into a lower tax bracket. Opening one is fairly simple — Charles Schwab is one of our top picks for its low fees and commission-free stock options. Betterment is a good choice for its automated IRAs, which let the robo-investors do the work for you.
Charles SchwabMinimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
BonusInvestment vehicles
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™, Schwab Organization Account and Schwab Trading Powered by Ameritrade™
Investment options
Stocks, bonds, mutual funds, CDs and ETFs
Educational resources
Extensive retirement planning tools
Pros$0 minimum deposit for active investingNo commission fees for stock and ETF trades and no transaction fees for over 4,000 mutual fundsOffers extensive retirement planning toolsUsers can get on-demand advice from a professional advisor/Schwab expertRobo-advisor Schwab Intelligent Portfolios® available as a no-fee automated service option (with Premium version available for a fee)Award-winning thinkorswim® trading platforms and all their cutting-edge tools are now available at Schwab.24/7 customer support access by phone or chatCharles Schwab offers over 300 brick-and-mortar branches across the U.S. for in-person supportConsSpecific transactions may require commission feeRobo-advisor Schwab Intelligent Portfolios Premium charges a one-time planning fee of $300, then a $30 per month advisory fee. For that price, you get unlimited 1:1 guidance from a CFP, interactive planning tools, plus a personalized roadmap for reaching your goalsBettermentMinimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn’t require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees
Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details.
Investment vehiclesInvestment options
Stocks, bonds, ETFs and cash
Educational resources
Betterment offers retirement and other education materials
Terms apply. Does not apply to crypto asset portfolios.
ProsNo trade or transfer feesGood for automated investingCustomizes users’ portfolios around their financial goals, timeline and risk toleranceUsers can assign specific investing goals (short- and long-term) to each portfolio and invest using different strategies (less and more risk)Quick and easy to set up accountAble to sync external retirement accounts to your Betterment retirement goal so all your accounts are in one place. Premium plan users get unlimited access to a financial advisor (otherwise, one-time advisor consultations cost a fee ranging from $299 to $399)Advanced features include automatic rebalancing, tax-saving strategies and socially responsible investingConsBase price for investing accounts is $4/month – recurring monthly deposits totaling $250, or total Betterment account balances reaching $20,000, automatically switch you to an annual price of .25% of your investing account balances Premium plan requires $100,000 minimum balanceLook for alternative ways to get cash that avoid further damage
While some people turn to credit cards or raid their retirement accounts, Cox said these things shouldn’t be your first strategy. Instead, your emergency fund should be your first place to start looking for extra cash.
“I’m not a fan of living on credit cards,” she said. As of November 2025, the most recent data available, the average annual percentage rate (APR) of all credit card accounts with assessed interest was 22.3%, according to the Board of Governors of the Federal Reserve System. Any balance carried from month to month would be charged this amount over the course of a year. Since this interest also compounds, credit cards are a relatively expensive way to borrow money.
While 0% APR credit cards do exist, they should be used with caution. After all, these low rates are typically only for an introductory period of less than 24 months. After that, any balance is charged the card’s regular APR.
But don’t rush to your retirement accounts if you’re laid off, either.
“I’m also not a huge fan of dipping into retirement plans and 401(k)s or IRAs because that would create taxable income,” she said. “And you’re not only increasing your taxes by doing so, but you’re also robbing your retirement.”
Your severance and emergency funds should be your first stops for covering expenses after a layoff.
Financial resources after a layoff
What should I do immediately after a layoff?
One of your first steps after a layoff should be to file for unemployment benefits. Next, arrange how you’ll be able to receive health insurance if that was part of your employment. Finally, size up your severance if you received any, and look at your savings and current spending to determine how much money you’ll need, and when.
How can I prepare for a layoff?
Saving as much as possible is critical to enduring a sudden layoff. Putting those funds in a high-yield savings account can help you strike a balance between allowing them to grow and keeping them liquid.
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Melissa Cox, a Certified Financial Planner at Future-Focused Wealth in Dallas, Texas.
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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