Worried about a Layoff?

In today’s economy, many people are facing a lack of job security. What steps should you take now to prepare yourself for that possible pink slip? Being well prepared for a bad situation can reduce stress and make it easier to stay afloat while you are not working. If you remain employed, none of these steps can hurt either your future financial well being or your job situation.

First, assess your financial situation. Review your savings, assets and investments. Most of us have far less in savings than we would like, but knowing where you stand is critical. Locate and organize paperwork for your home loan, car loans and credit cards. You may want to consider using this time, while your credit is good and you are still employed to handle any refinancing or request lower interest rates.

Look objectively at your current spending. Once you have a good awareness of where your income is going, you can start to make cut backs in various areas to increase your savings and better prepare for a lay off. Eliminate entertainment costs by using your local library,  eat at home rather than dining out, and consider cutting back on various bills and services if you are able. Simple changes can save you several hundred dollars a month, depending upon your usual spending. If you are a two income household, consider whether you can make changes now that will allow you to live on one income.

Consider selling off some assets to have additional cash on hand. Do this thoughtfully and with care. Listing your home may be wise if you have high mortgage payments. You may also want to consider downsizing your vehicle if you currently have car payments or a high value vehicle. Replacing an expensive vehicle with a cheaper used one can be a smart financial choice.

Prepare your resume. You may want to begin discreetly applying for jobs now, rather than waiting. Be sure that you have suitable interview attire for your field. Consider the possibilities of freelancing or contract work to provide some financial security while you are unemployed.

Shop ahead. While spending more may seem counterproductive, stocking a pantry is a smart decision in case of job loss. Include canned goods you typically use, baking supplies, pasta, rice, and beans. If you have a deep freezer, consider stocking meat, bread, and even milk or juice. A well stocked pantry will allow you to dramatically reduce your food expenses if you do lose your job. Be sure to rotate foods to avoid allowing items to become stale in your pantry.

Explore the assistance options in your community. There may be educational resources, financial aid, and job search assistance available. In most lay off situations, you will be able to collect unemployment.  You may be eligible for health care assistance, food stamps or other government programs.