In today’s economy, the concept of job security has become a thing of the past. People lose their jobs every day, and in many cases it’s through absolutely no fault of their own. Layoffs are common, and entire factories and offices frequently shut down, leaving workers to try to scrape by on unemployment if they qualify.
Layoffs and closings aren’t the only reasons people lose their jobs, either. You could be injured and left unable to work temporarily or permanently. Or you could fall ill for an extended period of time. Whatever the reason may be, loss of your job and income can be devastating.
But if you prepare yourself for these possibilities, they won’t hit you quite so hard. Here are some tips to help you do that.
* Start an emergency fund. Everybody should have at least three months worth of income put away in case of an emergency, and preferably six. That way, if you lose your income, you can still get by for a while and give yourself time to replace it.
* Keep your ear to the ground. Sometimes layoffs and closings come as a surprise, but there are often rumors and signs before they hit. If you start hearing about layoffs at other locations or hearing talk of changes to come, start putting in applications elsewhere. You can take job offers or not, but at least you’ll have some applications out there in the event that your job disappears suddenly.
* Keep your existing debt at a minimum. If you’ve run up a large amount of debt (especially credit card debt), get to work paying it down as quickly as possible. The less debt you have, the less interest you’ll end up paying, and the lower your minimum payments will be if you get in a situation where that’s all you can pay.
* Think twice before acquiring new debt. If you take out a loan and lose your job soon after, you could end up with your credit ruined. If you find it necessary to borrow money, get insurance that will pay your payments for you in the event of job loss if possible.
* Make sure you’re current on all of your bills, and get ahead on them if you can. The last thing you need when you lose income is for your electricity or phone to be cut off.
* Pare down your expenses. If you have a home phone and a cell phone, consider getting rid of one of them. Consider whether you really need that expensive cable package, or if you even need cable at all. Keeping your expenses low will leave you with more money to put into savings and pay down debts.
Being prepared for the loss of your job and income is not being pessimistic. It’s being smart. By getting your ducks in a row in case something bad happens, you give yourself a better chance of surviving the bump in the road and moving on to better things.
