IDENTIFY YOUR BASIC BUDGET
Your current budget likely includes things like your mortgage payments, groceries, travel, hobbies, debt, and savings. When a financial emergency hits, it’s important to identify your budget necessities to survive.
You should prioritize your needs: housing, transportation, and food expenses. Calculating this number will help you cut back in case you lose your job.
INCREASE YOUR EMERGENCY FUND
It's recommended to have an emergency fund that covers at least three to six months of your expenses. Your emergency fund is for use when special financial circumstances arise, such as medical expenses, a car repair, or something that requires a substantial amount of money in a timely manner.
A layoff is another situation that may require you to tap into your rainy day fund. It’s a good idea to begin increasing your contributions toward your emergency fund immediately. If you need to find extra cash, try using your basic budget to cut back on other expenses.
TAKE ADVANTAGE OF COMPANY BENEFITS
One of the best parts about working for a company is the many benefits they offer. Take advantage of these offerings and schedule doctor's appointments, get a dental check-up, and capitalize on your company-sponsored 401(k) match program. This prevents you from using your rainy day fund for these expenses.
ACCELERATE YOUR DEBT REPAYMENT
Debt can use up a large portion of your paycheck when you’re employed. When you're unemployed, it may be even harder to manage. While you still have a paycheck, prioritize the acceleration of debt repayment. You don’t want your debt to get out of hand or be something you’re unable to manage if you lose your job.
Try focusing on paying off your high-interest debt first while maintaining the minimum payments on all other revolving debt balances. This will help you save money and eliminate debt faster. You could also try to pay off smaller debt balances that you can get rid of quickly. Seeing your debt dwindle may increase your motivation to pay off your debt faster.
CONSIDER A SIDE HUSTLE
If you have a special talent or skill, most likely there’s a way to make money doing it. From music lessons to building furniture for your neighbors, you can make money doing almost anything in your free time. Starting a side hustle is a great way to boost your income if you're worried a layoff is coming soon.
Additionally, if you do get laid off, you will have an extra source of income to help manage your bills while you look for a new job. Get creative and identify the best way to make fast cash.
NETWORK, NETWORK, AND NETWORK SOME MORE
Have you ever heard the saying, “It’s not what you know it’s who you know that matters?” This statement is especially true for finding a new job. A recent LinkedIn survey reports that 85% of jobs are filled via networking.
Keep in touch with old friends, attend networking events, and continue to meet new people to build your network. If you happen to get laid off in the near future, you’ll have numerous people to contact and resources at your disposal.
KNOW YOUR OPTIONS
If you’re let go, it may be hard to put an action plan into place. Take the time now to put the proper steps into place so you have options.
Sure, these economic times can feel stressful. But if you lay the proper foundation, you can handle this transition with ease.