How to Financially Prepare for a Layoff

With so much talk lately about the gloom and doom of the nation’s economy-it can be hard to keep a cool head about your own career future. Will you be the next to be laid off? Every day you hear of another company closing its doors or laying off thousands of workers because money is so tight and business down. This said, how will you fare if/when it comes your turn to be laid off. By deciding to stop worrying in anticipation of being laid off, and instead, planning for what you will do if you are laid off; you save yourself a lot of unnecessary worrying, stress, and financial burden. Here is the best strategy for preparing financially for a layoff from work:

1. Savings- If you don’t already have a savings account for an unexpected emergency-such as a layoff-start one, now. No matter how tight money may seem now, in the event of an unexpected layoff, you will need every cent that you save now-especially if you have a lot of monthly bills. Whenever you get extra money, stick it away for an emergency. Even if you don’t get laid off, there is always something that comes up unexpectedly-such as your car breaking down or medical bills.
2. Pay off Credit Cards- Another must for an employee possibly facing imminent layoff is to pay off high interest credit cards. The last thing you want to have to contend with when you only have unemployment wages to depend upon is high interest minimum payments on your credit card. The more you can get paid off now, the less burden you will have when you don’t have a steady income.
3. Ease off Credit- As soon as you start worrying about a possible layoff from your company, it is wise to ease off your dependence on your credit cards. Though it might be a common habit to put a variety of costs on the credit card-the more you can pay with in cash-the less debt you have waiting for you when you are unemployed and probably unable to pay it off.
4. Live Simply- More than anything, when a layoff is imminent, it is necessary to start being more conservative with your money. Stop buying things that aren’t absolutely necessary. Though you may be craving that new, living room set or a family pool-hold off until your employment future is more secure. You will be more than happy if/when the day comes when your income is drastically reduced.
5. Make a Family Plan- Lastly, make sure you and your family are on the same page as far as cutting down on costs and old spending habits. Make sure that your husband / wife, or significant other and kids are well aware of the new strategy of your financial living for the present as well as the possible future of being laid off. This will alleviate any stress of having to deal with the wants and needs from your family in the future.