Are You Prepared For Job Loss?

Whether you feel secure or not about hanging on to your job, it makes a lot of sense to prepare for the worst. Here are a few things to start doing now:

Stop spending! In the first quarter of this year consumer spending increased 2.2%. It’s certainly not that Americans are earning more; they simply spent everything they earned, including their tax refunds. So get a grip on your wallet and don’t buy unless it’s absolutely necessary.

Start an emergency fund. Another thing I can’t stress enough. Set aside sufficient money to survive for a least six months with no income. If you hadn’t spent your tax refund you would have had a head start on this!

Put away the credit cards. If you can’t pay cash for it then you most probably don’t need it. So hide the credit cards and avoid temptation.

Live within your means. This goes hand in glove with not using credit cards. Stay home instead of eating out, make coffee to go and give Starbucks a miss, don’t think twice but three times before you buy anything.  Best of all, create a spending plan and stick with it.

Deal with high-interest debt. With a decent credit rating you certainly shouldn’t be paying more than 5 or 6% interest rate on your credit card debt. Transfer to a new card or talk to your current issuing company and tell them you want a lower rate. And if you’re credit rating isn’t so hot you should still request a lower rate. Explain to the issuer that money is restricted and you can’t keep paying the high fees. Chances are they’ll work with you. They’d rather get something from you than risk nothing at all.

Consider a line of credit while you can. Still employed and have equity in your home? It might be worth getting a home-equity line of credit.  But keep it on the back-burner for dire emergencies only.

Network. Now is not the time to become a hermit. Keep more options open by maintaining all your contacts – you might need them later!

Training and education. Does your present company offer any educational programs? Take all that you can. The more you learn the more marketable you will be in the event you find yourself job hunting soon. It might be worth a small expense to educate yourself by checking for online courses or night courses at a local tech college. Consider adding a little diversity to your skills.

Start a home business. Look for ways you can earn a little extra money from home now. Any extra cash can go into your emergency fund, you’ll benefit from additional tax write-offs and you’ll have a leg-up on an alternative income if you suddenly find you can devote yourself to it full-time. (Coming soon – 50 Ways to Make Extra Money)

Don’t forget health insurance. Without your employer’s contribution you may have to extend your coverage through COBRA and that can be very costly. Or shop around for other alternatives. Sam’s Club offers discount medical insurance to businesses but you don’t need to be incorporated to take advantage or it.

“If you would be wealthy, think of saving as well as getting.” Benjamin Franklin