Financially Managing a Job Loss
A job loss is one o f the most devastating events that can happen in your career. Yet in today’s world, job losses can occur multiple times in the course of employment.
Gone are the days of working for the same company for 40 years and then retiring with a pension and social security. Today, you must deal with lower levels of job security, provide financially for those times you are out of work, in addition to covering retirement needs, children’s college funds and more.Given that job losses are no longer an anomaly, preparing for periods of no or limited income, while you are still working, is sound financial planning.
PREPARING FOR JOB LOSS WHILE YOUR ARE STILL WORKING
Live Below Your Means. When you spend less than you make, there is money every month to set aside for the unexpected. This will build an emergency fund, which can be utilized if you experience a job loss or other financial setback. Money can also be contributed to other long term financial goals like retirement and college funds.
Live With a Budget. Each month you should have an established budget that helps you and your family control spending. The interesting thing about a budget is that simply having one will reduce spending. You will pay more attention to where the money goes and will spend more
thoughtfully. This results in better financial decisions and less impulse spending. If you live on a budget and live within your means, when unexpected events occur you are much better prepared to handle them.
HOW TO MANAGE A JOB LOSS WHEN IT HAPPENS
Review your budget and reduce spending. A job loss means a significant reduction in income. Even if you qualify for unemployment, this will not be enough to live off. Reducing spending to the bare bones as quickly as possible, will
help preserve savings. It may take significant sacrifices to cut back or eliminate nonessentials, but this will help you stay afloat and reduce the amount of debt incurred while you are looking for another job.Develop a Job Hunting Strategy. Loss of employment makes it is easy to get caught up in sorrow and depression because our identity is often wrapped up in our jobs. The longer you sulk, the longer you will suffer from lack of income. When you see your new job, as getting another job, it can motivate you to get out and network. Let everyone know what your job skills are and what you are looking for. The internet has changed the way work is found. Meeting with a resume specialist can help you
understand the nuances of applying for jobs online and tips and tricks to getting your resume noticed among the mountains of applicants.Get Support From Family and Friends. A support group is essential as there will be days when getting motivated will be really hard. Job hunting offers a steady dose of rejection that comes with the territory. Being surrounded by friends and family to remind you of your value and the skills you bring to the table will help you get through.Volunteer. Staying busy is really valuable with a change in employment. Volunteering can lead to connections for a new job. It can provide a boost in self-esteem as you realize your value and can help you keep your current skills active or even develop new skills. It also provides a commitment.
Someplace you need to be on a regular basis.
Losing a job is one of the hardest things you must endure during your career. Many people discover that losing one job can lead to a job that either pays better or is more fulfilling. Sometimes you get the benefit of both. Life is very unpredictable and being financially prepared for unexpected events will help keep your finances healthy, even when life throws you a curveball.