Most experts recommend that when the going is good, you should save the equivalent of 6 months of your salary, as a safeguard against losing your job and the time it may take you to find a new job. However, even this may not be enough, if you have a family and there are no other wage earners in the family.
However, most of us are not prepared for losing our jobs, snug and complacent that our jobs were safe and would last as long as we wanted them. So what do we do if this dreaded day becomes a reality, how do we manage our finances.
Here are some suggestions:
1) Analyze Your Spending Habits
When you are assured of your monthly check, spending causally and without much thought becomes a habit that can make us spend recklessly on things that we really do not need. We have no idea how much we are spending on things either than fixed expenditures, like mortgage, rent and installments on our car. Are you eating out to much, or does your grocery bill contain items that you purchased just because the bargain was good? Being aware of where your money is going, will allow you close the gaps were money is not being prudently spent and help you save.
2) Make A List Of Expense Priorities
Now that you don't have a job, you are faced with two major problems. The monthly check that you took for granted has suddenly done the disappearing act and sitting idle at home, your expenses are likely to rise. So you have to manage whatever savings you have very judiciously. Your extravagant ways have to go and you must avoid the temptation of taking in that movie, or eating out, going down for a glass of fear, because you have nothing better to do.
3) Develop A Budget
Develop a budget that does away with most preventable expenses. This does not mean that you adopt such austerity measures that life becomes dull and unhealthy. Let entertainment and eating out, still be a part of your agenda, but you have to make changes appropriately. When you go to movies look for discount admissions. Find out low-priced economical places to go out to eat and drink. Just make sure that there are no wasteful expenses.
4) Postpone Major Purchases
Okay you've wanted that new car for a long time and the big game that is coming up on the weekend would look great on a plasma television. Well, you got to postpone it. Tiding over these difficult days is more important and don't assume that your job is just round the corner, it could take months.
5) Make Sure Your Severance Package Is Worth Your While
Laid-off employees are normally offered a severance package. Most employees, when they are hired are so excited of having landed a job that they overlook negotiating a severance package. But even during termination you can play hard and get a good severance package. Make your departure count, make them pay for it.
6) Explore What Federal Assistance Programs Are Available To You
In the event of a layoff, a number of governmental programs become available to the laid off workers. You could perhaps be eligible for unemployment insurance. Many states offer training, loans and assistance in helping you set up your own business.
7) Find Short-Term Employment
The job that you are looking for may not be available easily. This does not mean you twiddle your thumbs waiting for it to drop in your lap. Whilst you make efforts to seek out openings for the type of job that you are qualified for opt for part-time jobs or short-term employment. It would be ideal if you could find such temporary employment in a field of your choice, but get one so that you earn some revenue and can stretch your savings, till you get a full-time job. But ensure that the short-time job gives you enough leeway to pursue your main aim for getting a job that was on par with the one you left, if not better.
It may turn out that your layoff was a blessing in disguise and you land a job sooner than expected and that too at a higher salary. But it could also be the other way round. The new job could be delayed beyond expectations and if your money runs out you may have to settle for a job that you would not normally accept. It is always best to be safe than sorry.
