Yet More Tips To Prepare For A Layoff In Advance

Last week, I wrote a post 5 Tips To Prepare For A Layoff In Advance.  Judging from the above-average number of comments that post received, this is obviously a topic many people are interested in.  Just as obviously, there are a lot of great tips I missed.  Thus, I’ve decided to go back and highlight a few of the contributions made in the comments of the previous post (thanks to the Studenomist for the post idea).

Yet More Tips To Prepare For A Layoff In Advance

• Four Pillars suggests that if you know you’ll be getting a sizable severance package, you can cut back somewhat on the emergency fund.  While this is true, I think it would be unwise to rely on the largesse of a former employer to see you through the tough times.  Besides, if the reason you’re losing your job is that your employer is going out of business, there probably won’t be any money for severance packages to begin with.
• Tom suggests building up multiple, alternative streams of income well in advance.  This is excellent advice and applies whether you think you might get laid off or not.  The extra income from this blog (and my new but growing Spanish blog), while relatively small, certainly helped tremendously during my period of unemployment.  Dividend-paying stocks, government bonds, FDIC insured bank CDs, income-producing real estate, and other income investments are also immensely valuable when you’re unemployed.  Even just a few hundred extra dollars per month can mean the difference between survival and bankruptcy in a prolonged downturn.
• Andy says you should pay down high-interest credit card debt as quickly as possible.  I can’t believe I missed this one.  Of course, paying down high-interest debt should be your top priority if you think there’s even a slim chance you’ll lose your job.  Paying off your mortgage would also make sense from a cash-flow and peace-of-mind perspective, but of course you’d have to weigh that against the long-term financial benefits of low-cost leverage.
• Revanche stresses the importance of having your references in order before you need them, which is ancillary to my suggestion to beef up your network while you still have an income.  Of course, job references are the most direct and obvious manifestation of your network.  If you don’t have decent references, your chances of finding a good job are probably close to 0%.  I didn’t have any references arranged at the time of my layoff, but fortunately my former coworkers and boss were more than happy to help out.  Had I not been on good terms with my former coworkers, however, I would have had a much harder time of it.

Are there any you think I’ve left out?  Leave a comment below and if I get enough good suggestions, I will highlight them in a future post.