How To Proactively Survive A Layoff

I survived a layoff in fall 2008 and as the unemployment rate in the U.S. continues to increase, you may be worried that you could be next.  Instead of waiting until you’ve lost your job to wonder if there is anything you could have done before hand to make it easier on yourself, take the following financial steps to improve your odds of surviving a layoff.  I sure wish I had followed some of this advice before I was unemployed.

Start or Add to Your Emergency Fund

Financial experts will tell you to keep between 3 and 6 months of living expenses available in a savings account in case of an emergency.  During a recession, it’s possible to be out of work for much longer than 3 to 6 months.  The more you can save, the better you’ll be if you do find yourself experiencing a layoff.

Temporarily Stop Investments and Retirement Savings

If you are very concerned that you may be next on the list of employees to be laid off, it might be a good idea to temporarily stop long term investing and retirement savings.  Use the money you would normally use for investing and retirement savings to bulk up your emergency fund or pay off small bills to reduce your monthly expenses.

Make Adjustments to Your Spending Now

Most people will reduce their expenses and cut back on any unnecessary spending when they are laid off, but if you start with these financial adjustments before being laid off, you can use your newfound savings to pay off high interest debt or add to an emergency fund.  Take a look at the typical spending areas, like cable television, cell phones, eating in restaurants or getting take out, or unnecessary subscriptions – and find areas that you could reduce your spending.  You may choose to make changes now or you can at the very least identify all areas that you could cancel immediately upon a lay off to help you reduce expenses as soon as you know you need to.

Make Health Care Appointments Now

If you have medical, dental and vision health coverage through your employer and are worried about becoming laid off in the near future, make appointments for all of your routine health care needs while you’re still covered.  Get your eye exam and dental cleaning taken care of, have a physical with your doctor if it’s time or nearing the time for your regular exam.  With a little luck, you may have a new job before you need to make more health appointments.

Layoffs are always stressful, but if you take steps proactively, you can make the transition easier on yourself financially.