The Trump administration’s recent push to reduce the federal workforce has led to widespread layoffs. Federal workers now face a difficult job market, compounded by slower hiring rates and stiff competition for white-collar positions.
Sluggish Hiring and Increased Competition
In January, the U.S. economy added only 143,000 jobs, fewer than expected, while unemployment stayed low at 4%. Despite the overall low unemployment rate, hiring has slowed, particularly in white-collar industries. Federal workers hoping to transition to private-sector jobs will now be competing with private-sector professionals for a shrinking number of opportunities.
Financial Strain for Laid-Off Workers
Many Americans lack sufficient savings to cover job loss. According to Bankrate, 43% of Americans would need to borrow money for unexpected expenses like a $1,000 emergency. Laid-off federal workers, without adequate savings, may struggle to cover bills and delay financial goals like saving for the future or paying off debt.
How to Prepare Financially
- Know Your Unemployment Options
Learn about state unemployment benefits and the UCFE program for federal employees. You can also extend health coverage for a brief period after a layoff. - Build Emergency Savings
Aim to save 3-6 months of living expenses. Adjust your budget and set up automatic savings transfers from your paycheck. - Cut Non-Essential Expenses
Review your spending and cut back on subscriptions, dining out, and entertainment. Continue saving for retirement and paying off high-interest debt. - Explore Alternative Retirement Options
If you lose access to the Thrift Savings Plan, consider opening an IRA to continue saving for retirement.
Conclusion
Though the job market remains challenging, federal workers can take proactive steps to manage their finances and prepare for a lengthy job search. By building savings and cutting unnecessary expenses, they can weather the uncertainty ahead.
