Losing your job can be one of the worst things to happen to you. Not only will it be a major strain upon your family finances, but it will increase your anxiety as well. By learning to manage those finances efficiently before you get laid off, there are some ways you can ensure you stay afloat if you do lose your job. What follows are samples of best and worse case scenarios, along with tips to ensure you are able to continue on without sinking too far into debt along the way.
The “Best Case” Scenario
Losing your job can be devastating for you and your family, but if you have other sources of income or finances going, it can be a little easier to manage. If your partner still has a job, at least you still have income coming into your household, which is better than nothing at all. You may also be able to tap into your savings account to help you until you’re able to find a new job. It’s also possible that you are only out of work for a few weeks because you had another job lined up. Any certified public accountant will tell you that it’s important to have at least three months of income in a savings account. When you plan ahead, you can work towards getting this by putting a few extra dollars into savings each and every week. As it accumulates, you’ll also start to earn more interest and before long, you will have what you need in your savings account.
The Worst-Case Scenario
If you’re laid off and you were the only source of income for your family, you’re in a little more of a predicament. You were likely living paycheck-to-paycheck as it was, and now with no income, you’re going to be scraping by. If you don’t have any real funds available in your savings account, you need to figure out a quick way to reduce your expenses and get some form of income coming into your household as quickly as possible. You may also have your credit cards maxed out and poor credit, leaving you with no options in terms of making purchases at all. Many of the worst case scenarios can be avoided if you plan ahead. While you don’t really want to consider the idea of being laid off, there’s no industry or company in the world that’s immune to layoffs at any given time. When you keep this in mind, you can take some precautions to ensure you aren’t running into problems down the road.
Tips for Managing Finances
Your primary goal is to reduce the number of expenses you have going out the door each month. When you don’t have an income coming in, you want to avoid wasting any kind of money. Dining out should be stopped immediately. It is much cheaper for you to cook your own meals than to go out, no matter how convenient it might be. Start cutting coupons for the grocery store and switch to generic labels if you haven’t already. Try to see if you can save on your electricity bill, see if you could switch your electricity provider and see if you can qualify for a no deposit electricity plan.
If you don’t have a savings account to tap into, see what you have in your home that you can do without. You may be sitting on some income by getting rid of things you no longer use. Put them up on an online auction or have a yard sale. Any kind of money you can get coming in will be better than nothing. Depending on the circumstances surrounding losing your job, see if you qualify for unemployment. While it may not be your entire paycheck, it will be something. Many people don’t cash in on this opportunity because of pride; however, until you find another job, it can be what you need to maintain a fairly normal lifestyle, even if it means that you’re making cutbacks on everything.
Looking for Employment
You should always have an updated version of your resume available and should update your resume every couple of months. Even if you’ve got the ideal position, layoffs are always possible. If you’ve got a resume that’s updated, you can get it online and in the hands of recruiters much faster. Don’t sit around the house feeling sorry for yourself. You have to get out there and do something, so it might as well be trying to find fresh employment. Consider the following tips for your job search:
- Use the social media sites to help you, including Twitter, Facebook, and LinkedIn.
- Reach out to past co-workers to see if they are working somewhere that is hiring. When you know someone at a company, it can be easier to get your foot in the door.
- Post witty comments on blogs for your chosen job field and (re-)tweet interesting articles and ideas in order to gain the attention of a recruiter and land yourself an interview.
- Don’t be afraid to take a job in your field that is lower than the position from which you were originally laid off. Some form of employment is better than no form of employment. Remember – it’s easier to find a job when you’re employed than unemployed.
Avoiding Unemployment Scams
Unfortunately, there are plenty of people out there preying on people who have just been laid off. When you’re trying to stay afloat and make ends meet, the last thing you need is to fall victim to an employment scam. Be cautious of companies that will give you loans. The loans are likely going to provide you with a very short-term solution to your problems. It will also be followed by a very high interest rate which will sink you deep into debt. Also, any work-from-home opportunity (or something similar) presented to you should be examined carefully.
Also, if a company is asking you for money to get you started on a way of earning an income, they are likely going to be the only ones making money out of the deal and it’s a huge red flag for a scam. You should never have to pay for a job, it should always be the other way around! Ultimately, out of all the tips we’ve presented, the best tip for helping you and your family stay afloat if you are laid off is to manage your finances starting now. You never know when you could lose your job, so preparing for it is the best move you could possibly make. That way, if it does happen, you will be able to make the most of the situation until you can get back on your feet and have a steady job