In this struggling economy with so many businesses either closing or laying off employees it’s almost impossible not to worry about receiving the dreaded pink slip. Even with a secure job, it is difficult to know what the future holds. For this reason, is it is always best to be prepared rather than being caught off guard. Taking a few precautions and reviewing home finances is the best way to feel secure if the dreaded lay off occurs.
Review Home Expenses
Look carefully at what the family spends each month and see where cutbacks can be made. Does the family eat out often? What about that daily expensive coffee or the gym membership that is never used? Are there extras on the cell phone bill that can be taken off? Scrutinize spending to find any extra money in the budget that is wasted. Once the extra money is found it is time to think of the next step – saving money.
If savings have never been big on the to-do list, now is the time to start a savings account. It is recommended to have a least six months income in savings to help get through a layoff. While this may seem like an impossible amount to accumulate, it is better to start toward a goal than to do nothing at all. Figure out how much money can be put away each paycheck and then do this before spending money on anything else. The money being saved from budget cutbacks will help build a healthy savings account in case of a layoff.
Get Debt Under Control
For those who own a home, it may be time to re-evaluate the mortgage. Chances are good right now to refinance at a lower interest rate and get a lower monthly payment. Take a look at other loans too, such as a car loan or boat loan. Finding a lower interest rate for these loans or incorporating them into the mortgage can save on interest payments. This is also the time to work on paying off credit card debt. Try to consolidate high-interest cards onto one lower interest card so the balance can be paid down faster. Remember, the point here is to lower the amount of money owed so it can be paid off faster, not to open up credit to be used for new purchases. Owing less money on bills will help greatly if a lay off occurs.
Whether a lay off is in the future or not, it is advisable to watch spending until certain there is no risk of a layoff. Put aside credit cards and try to not use them for everyday expenses. Maintain the cars currently owned instead of going out to buy a new one. Even if the flat-screen television the family has been wanting is on sale, don’t risk spending the money right now. There will be less stress and more security by living within a budget and keeping debt low. The plus side is when the economy does begin to grow, and if no lay off has occurred, the family will have healthy savings account in the bank and less debt.
Update an Old Resume
Pull out the old job resume and update it. This way it will be ready in the event it may need to be sent out to prospective employers.
Keep an Eye on the Job Market
It never hurts to keep an eye on the job market even if a lay off isn’t pending. Keeping current on what’s available and the salary the jobs receive will help in the event of a layoff. There is always the chance of finding a better job right now, too.
Review Health Benefits Policies
Review the health benefits at your current job and check on the options available in the event of a layoff. Some businesses allow an extension of coverage for a period of time as long as the premiums are paid. If that isn’t an option, check into what it will cost to purchase health insurance or the qualifications for a state health insurance program. It will be helpful to know what the options are for health insurance in the event of a layoff.
The most important advice is to not become stressed about a possible lay off. Unfortunately, no one has control over which businesses will or will not succeed in this economy, so try not to stress out about whether or not a job loss will occur. Actively preparing for a possible lay off will put you one step ahead of the game if it does happen.