How to plan for losing your job – 8 Ways
Tough times call for tough decisions and preparation – that is why it is crucial for every person out there, no matter how secure they feel in their current job – to get organised and have a backup plan should they be laid off or made redundant.
With unemployment rates steadily rising in Australia and the ever growing threat of the looming financial crisis, it is essential that you are not only prepared, but have a contingency as to how you will work your personal finances in tough times.
Here is a list of things to do in order to get organised and prepare you for the worst case scenario, both personally and financially.
Personal / Career Preparation
Below is 4 ways to get your personal and career development in check – doing these things will leave you better prepared should the worst happen.
1. Your resume or CV
Keep your resume or CV up to date. Many people don’t touch their CV until it is time to hunt for the next job. It is wise to constantly keep it in order and ensure that your achievements and progress in your career is listed in detail. Every month, have a breeze over it and try and find where you can further add and refine the content.
2. Keep in touch/Network
Many people make great friends and colleagues at previous jobs, only to never see them again. Sure you only had your day to day work in common, but with a little bit of networking and social drinks, you will quickly be able to bridge that gap and create unique and helpful friends to keep in contact with.
This isn’t using people for your advantage, it is just the smart thing to do – keep in touch, have a laugh, as one day your extended network may be able to offer you an olive branch in times of need.
3. List your positive attributes at current job
If you have a performance review coming up, there is little doubt that discussion will be around your positive and negative attributes in your current position.
It is suggested that you should note down throughout the year and achievements you have made along with some of the ways you have helped the company without anyone noticing. Writing this list will help you have more inventory to discuss should the discussion go down the path of negative performance and potential redundancy.
4. Work hard
Last but not least, work hard. Enough said. Keep your head down, work as hard as you can and actively involve yourself in day to day work activities.
The more you can show you add benefit, the less likely you will be to lose your position when the dreaded talks come about. No one wants to lose a hard working employee to a competitor.
Financial Preparation
The scary thing about being unemployed or laid off is the concept of money. Where will you get enough money to survive? How do I pay the mortgage with no job? The list goes on.
Here are 4 ways to help you prepare financially for losing your job;
1. Build your nest egg
We discuss this a lot at Savings Guide, but why wouldn’t we? We want you to get excited about saving money, gone are the days of putting everything on debt. We need to ensure that we are constantly saving certain percentages of each pay cheque for the ‘rainy day’ fund or the ‘nest egg’ fund we often discuss.
You will be amazed at yourself should you find yourself in financial trouble from losing a job, to realise you have tucked away a neat $20,000 in your savings account for days exactly like this.
2. Pay down debts while you can
When you still have a job, pay that debt down. Try and get rid of it. Having debt to pay when unemployed is a sad prospect and something that many people struggle to deal with.
What does this mean?
Pay your credit cards off, consolidate debts, save as much as you can and really try to lower that mortgage while you are still working. Some institutions even let you get ahead in payments, meaning you have some leniency should you find yourself in financial trouble.
3. Factor in risk with your investments
If you are actively investing, it might be a smart move to evaluate your risk exposure. Will you need that money you just invested in shares in the next 3 months? If so, it may be wise to just save the money, not invest.
4. Use credit to your advantage
We strongly advise that people minimise their exposure to credit and debt – it doesn’t feel good and can really hinder your plans for building your personal finance empire. Having said that, credit can be useful when used wisely. For example, buying a house cannot be done with cash alone – it would take far too long to save and you would just see prices increase.
It may be wise to ensure that you have access to credit should you really require money when out of a job. The idea of spending on credit with no means to pay back is a horrible prospect, but it may be able to tire you over until your next job.
How would you plan for losing your job?
We want to hear how you intend to save money and minimise the chances of losing your job. Any other ideas?
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