Tweet

‘6 things you MUST-DO to ensure your family survives a job loss’

Guest post by: Rhonda Sherwood

Article Overview: Nobody takes pleasure in suddenly becoming unemployed. Just the ‘prospect’ alone can be very overwhelming and stressful. Often the worry or anxiety comes from feeling you have no control over the situation. This is partially true, you may not be able to control what your employer does but you can control to some extent how it will affect you and your family. The reality is, no one’s job is really secure but a layoff doesn’t have to be the end of the world. The key to survival is to be prepared, especially with regards to your finances. Here are some things you can do in advance of being laid off:

‘6 things you MUST-DO to ensure your family survives a job loss’

Nobody takes pleasure in suddenly becoming unemployed. Just the 'prospect' alone can be very overwhelming and stressful. Often the worry or anxiety comes from feeling you have no control over the situation. This is partially true, you may not be able to control what your employer does but you can control to some extent how it will affect you and your family. The reality is, no one's job is really secure but a layoff doesn't have to be the end of the world. The key to survival is to be prepared, especially with regards to your finances. Here are some things you can do in advance of being laid off:

1. Have emergency funds put aside to cover at least 3 to 6 months of your basic living expenses, such as your rent or mortgage, utilities, food and debt repayment.
2. If you are living paycheck to paycheck and do not have the extra funds at the moment to build up savings then set up a line of credit while you're still employed. I am always cautious giving this advice, especially to people who have trouble staying out of debt. While you have an income, go to your bank and see if you qualify for more credit. If you lose your job and have no replacement income or not enough to cover your monthly costs, you will be in real trouble. This is when people get desperate and max out their 18% credit cards or potentially file bankruptcy. So get a line of credit now just in case you'll need one later.
3. Get out of as much debt as possible. Transfer high debt loans/credit cards to lower interest rate vehicles and then start aggressively paying them down. By reducing or eliminating your debt, you reduce the amount of money that leaves your pocket each month. If you lose your job, you want to be able to survive on as little amount of money for as long as possible.
4. Develop a 'layoff' budget before you lose your job. Figure out what sources of income you will have coming in such as EI and/or a severance package. Assess your basic living costs - mortgage/rent, utilities, loans, and food. Ensure you have an emergency reserve and/or line of credit established that would cover any shortfall in income over a6 month period.
5. Start living within your means now. Generally a good idea, regardless of whether or not a layoff is looming, but if a potential job loss is on the near horizon, avoid any unnecessary purchases for the time being, such as a new car, vacation, or renovating your home. Live as frugally as you can now and bank any extra monies. We have heard it all before, leave the credit cards at home and pay cash for all purchases. Try to grocery shop only once a week. Eat out less. Re-evaluate your monthly bills and find ways to reduce them; call your phone provider and see if a better, less costly plan exists, let go of some of the cable channels. Get the whole family involved in the process. It will definitely teach your kids some smart money practices.
6. Find ways to bring in some extra money now and then bank it. You could have a garage sale, sell things on ebay or assess your skills and see if there's something you can do on the side for extra income or get a part time job now. Necessity is a time for creativity. Most importantly, bank all the extra monies you bring in.

Losing a job can often be a harsh wake-up call to how financially on the edge we have been living. In other words, living paycheck to paycheck.

If you are fortunate enough to be notified ahead of time of a layoff then I would highly suggest that you use that time to your advantage. Don't just wait for the pink slip to be given. Even using one of the tips I have given will make a difference to your overall financial health. The reality is that a layoff could happen at any time and it's best to be prepared. Hope for the best but prepare for the worst.

Related Articles
  Manage Salespeople One at a Time
  Another One Bites the Dust
  What Would You Do With A Second Chance
  Is Your Business Ready for 2010?
  Job Loss: If You’re Fired What’s Next?

Article Tags: amount of money, anxiety, bankruptcy, budget, credit cards, debt loans, debt repayment, emergency funds, extent, interest rate, job, li li, living expenses, living paycheck to paycheck, mortgage, nbsp, paycheck to paycheck, pleasure, survival, worry



Related Forum Posts
Unplanned expense & debt - If you cannot support your family out of debt then at least you should not be an additional burden to them. Given the current level of debt, even if there is a small financial turbulence. (temporary income loss or sudden unplanned expenses), the family will end up in a sudden unplanned expenses), the family will end up in a massive financial whirlpool for many years. Loans should be taken for basic necessity and within reasonable limits. Do you have anything to add to this point of view.
Re: Help needed in starting a company in Patent Analysis - It is well worth while running the question about the software tool by a lawyer - particularly since the existing company is going to be harmed several fold - i.e. loss of staff, loss of customers and perhaps loss of unique rights to the tool. My gut reaction would be to name a spokesperson to speak to the senior manager about the issues - without mentioning any threats of leaving, names of your future partners, competing or use of common tools. For sure you will run into them later so it makes sense to attempt to resolve differences now and only when it becomes impossible to do so or the opportunity to create a new firm becomes so attractive that you actually do leave. I don't envy you .... Terry
Re: Hot Stock Tip! - So if $10.86 is the highest the Freddie Mac shares went, your stop loss (cut and run) price (at 25% down from the high) is $8.14 (if my sums are right) so you're position is no longer exposed - provided you stick to the system and don't get emotional, oh, and are also able to execute quick sale as soon as your share price hits the stop loss figure!!! GOOD LUCK!!
Re: Advice Wanted - I keep saying this but I have to say it again. I dont like partnerships. Any family money should be a know donation to you before hand. Borrowing from family is one of the worst most stressful things you can do. I would have to know more to give any real advice but be careful with partners. If you do decide to take on a partner make sure you get a good business attorney.
Re: Approaching Social Marketing from the right angle - Well David from my experience having your friends around you on a social network can really benefit your business as long as you ensure that a few simple rules are observed 1. under no circumstances should you direct promote a particular site or product simultaneously with your friends IE all submit the same link numerous times between your circle,(spam) again use your signatures to do the selling. 2. ensure the topic of any discussion is suitable to include the rest of the community and especially those that connect with you. 3.if commenting on a member of your circles article or post keep the comment honest don't say it is a good post if you really believe it to be rubbish, this may upset your friend who created the post but will show the rest of those viewing that your being open and up front in how you treat people and are not showing favoritism - you are prepared to treat them as equals. Relationship/Social Marketing works best when you can create an environment where visitors to your group get a sense of family and a warm welcoming oasis in a sea of unknown people, most of the time you won't need to promote your product or opportunity because once new people start to relax their natural curiosity will cause them to ask about your online endeavors. You can mix business and social friends successfully on a social network providing you ensure the social rates higher than business.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Severance and Separation Agreements

How to Improve Your Time Management

Effective Leadership

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.