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My 16-Year Career Ended so I Started Over — Here’s How

Michelle Summerfield

It was 2015 when I received the words that most of us dread: “We have to let you go.” I had spent 16 years building a career in sales and marketing — the past five with this particular organization — only to have it all come crashing down in a matter of minutes. Sometimes you see these things coming, and other times it’s like a slap in the face.

Ask any personal finance guru and they’ll tell you to save three to six months’ worth of living expenses for situations just like this. At the time of my layoff, I’d been working hard to channel money into my emergency fund and Registered Retirement Savings Plan (the Canadian equivalent of a 401k) and still live life. Luckily, at the time of my layoff, I had been able to save one month’s expenses — nowhere near the recommended standard, but it still ended up saving me.

Read More: I Lost My Job and It Was Exactly What I Needed to Fix My Finances

Things They Don’t Tell You About a Layoff

Layoffs aren’t easy, but these are some things you should know in case you ever find yourself in this situation.

Unemployment Insurance

Unemployment insurance isn’t instant. It can take several months for the checks to start rolling in and you’ll have to cover things like your mortgage and other bills in the meantime.

Termination Pay

Termination pay isn’t instant either. Your vacation pay, termination pay in lieu of notice and last paycheck, though owed to you, could take a while to get to actually arrive. Your employer isn’t obligated to pay you the moment they let you go. They have to pay you by the next pay cycle, which could be one to two weeks away.

Severance Pay

If you’re entitled to severance pay or take your employer to court, it could take months to see any money. In my case, it took a whole year to take my employer to court, be awarded a settlement and then several months for my employer to pay it out.

Making a Change

It can take time to change careers. Exploring new options, going back to school or building a business from scratch could take months or even years. Without an emergency fund, I would have hopped right back into another job without any thought. My fund gave me a buffer to clear my thoughts and take time to think about what I wanted to do for the rest of my life.

Read: What This Family Learned From a Layoff

So What Is an Emergency Fund Anyway?

An emergency fund is a stash of cash hidden away from your normal bank accounts for yep, you guessed it, emergencies. Now, an emergency doesn’t have to be job loss. It could be replacing the roof on your house when it suddenly starts leaking, fixing your car when it breaks down unexpectedly or paying for an emergency root canal when you accidentally chomped down on a hard candy. I’m guilty on the root canal front.

Why Is an Emergency Fund So Important?

The No. 1 reason is to avoid debt or further debt. The second reason? It reduces stress. Job loss is stressful in itself, so why stack more stress on by not having money set aside?

By having an emergency fund in place, I was able to take my time with the job search and focus on what I really wanted from a career. It gave me stress-free space to think about what I wanted, instead of having to jump back into a career I no longer loved. After a lot of thought, I realized I wanted to change careers and become a writer.

My emergency fund also gave me the opportunity to take a little time off to focus on my health that had become so bad.

How to Build an Emergency Fund

Let’s keep it simple here. Money should be simple, right? If you’re building an emergency fund from scratch, start by opening a no-fee savings account that is hard for you to access. Well, not too hard, but outside of your regular banking. You don’t want to be tempted to dip into it.

Most financial experts recommend three to six months’ worth of living expenses saved. That is a huge chunk of change and can be difficult if you’re in debt. According to a 2017 GOBankingRates survey, 57 percent of Americans have less than $1,000 in savings and 39 percent have zero. Finance experts like Dave Ramsey recommend saving up a $1,000 fund quickly then focusing your money toward debt. That way, you’ll avoid incurring more debt if an emergency does pop up.

When you’re debt free, channel the money you normally would have paid to debt into building a three-to-six month fund. Take your time. You don’t want to get discouraged.

Losing your job is not fun; don’t make it worse by not having an emergency fund. If you have a buffer in place, it will take pressure off of you to find a new job right away, and you’ll feel relieved that you have money set aside to be pay rent, utilities and feed yourself and possibly your family if you have one.

Click through to read more about 10 common jobs facing extinction.

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This article originally appeared on GOBankingRates.com: My 16-Year Career Ended so I Started Over — Here’s How