The present economy has been one of unsure financial circumstances. People have lost their jobs, their income, their homes, and their security. Many companies that were previously booming found a drastically sharp fall in income, and consequently had to let hundreds, if not thousands, of loyal employees go. While some companies alerted their workers know with time to prepare, many others found themselves hit with an unsuspecting blow by going into their job and leaving unemployed.
Families were left upside down with the sudden lost of income, and their lives were never the same. Although things are getting better, almost no job is recession proof. Even if you think your job is secure, it doesn’t hurt to prepare for a layoff. Here are seven ways to do so:
- Pay down debt: One thing that really puts a dent in many families’ finances is debt payment. Sure, it may seem like paying the minimum is keeping money in your pocket, but interest rates will leave you broke for a long time. Work on paying down your debt as far as you can. Dave Ramsey has a plan to eliminate your debt called the debt snowball, where you work on paying off one debt at a time, putting as much money as you can towards one and the minimum on the rest. Once that debt is paid off, you focus on your next debt. The less money you owe, the more money you’ll have.
- Aggressively save: An emergency fund is a stash of money that you can rely on in case of an emergency. A job loss is definitely something that qualifies as an emergency. You don’t want to live off credit cards until you find another position. Start saving as much money as you can into an account to prepare to support you and your family in case of a layoff. A good rule of thumb is to save between 6 months and one year worth of expenses. Hiring can be slow, and it may take this long to find a new job.
- Cut expenses: Now’s the time to cut as many expenses as you can. Find the luxuries you can do without, and get rid of them immediately. Decreasing the amount of money going out will assist you in money management in the event you lose your job. Find free or frugal ways of entertainment, learn to cook instead of constantly eating out, and try not to drive everywhere so you spend less on filling up your gas tank.
- Practice living off one income: If you are in a relationship or marriage, your loss of income can greatly affect your household. If your spouse is working, try to live off of one income to get used to the change. My suggestions is to pay expenses with your spouse’s income while using yours to eliminate debt and bank savings. It won’t be as much of a shock when the transition is real.
- Line up interviews: If you know for sure you’ll be out of job soon, don’t waste any time preparing for new opportunities. Start looking for open positions in your field or similar to your current position, and send your resume. Get some interviews lined up and be truthful. Tell the interviewer that you’re preparing for a possible layoff and want to find opportunities before it’s too late.
- Update your resume: Who needs an up to date resume when you have a job, right? Well open that document and get to editing. Include your current position and responsibilities, add any new skills you’ve acquired since working there, and update your objective. You’ll be sending this around via e-mail, and possibly in person, so make copies.
- Network relentlessly: A good chunk of employees have gotten their jobs through people they know. There are thousands of meetups every month, based on interest. Attend as many as you can, and stay equipped with business cards. Tune up your elevator pitch and start telling people you’re looking for a job. Update your LinkedIn profile, and ask everyone you know if they are aware of anyone hiring.
Layoffs can be absolutely devastating, and can set you back both financially and emotionally. Prepare as early as you can to avoid any additional debt.
Briana Myricks is a 20 something freelance writer and blogger. Striving for financial independence as a newlywed, she blogs about young married life at 20 and Engaged.