Thursday, April 15, 2010

Layoffs: Make the Best of a Bad Situation

It is common to hear, “It can’t happen to me,” and suddenly what couldn’t happen to you becomes a harsh reality. This is true for many people who have found themselves out of a job. The best rule of thumb is to be proactive. Anything is possible, even if you think your job is 100% secure.

Even in times of good economic standing, it is important for people to live within their means, budget appropriately, and save any money they can. Today, that same mindset is even more important as unemployment is on the rise, businesses are going under, and foreclosures have reached an all time high.

Most financial advisers would advise you to save up to six months of living expenses, as an emergency fund or what is today known as a “jobless” fund. However, in today’s circumstances, it is wise to save not only for 6 months but for 12 months or more.

Need help developing a plan of action for “It can’t happen to me?” Here are some helpful tips to live by:

• While you are working, double the amount you put into your emergency fund.

• Downsize where you live. Evaluate your space -- is it more for the comfort and prestige of having it?

• Call your landlord or rental agency and explain your situation. Ask about deferred-payment plans for rent or see if your loan allows it to be restructured.

• When you find out you will be without a job, file for unemployment immediately.

• Look for personal health insurance. Many people who lose their job lose their benefits as well. Health insurance is often something people think that they can live without but costs you more if there is an accident or personal illness.

• Develop a strict budget plan and follow it line by line.

• Prioritize your debt. Pay the big bills like; mortgage/ rent, car payment, utilities before anything else. Of course, it is the goal to pay everything on time but sometimes that is not possible. Learn to know what you can live with and what you can live without.

• Sell things you no longer need. For example: electronics, jewelry, a second car, etc.

• De-invest. Investing is great if you have the money to do it. However, it is not a priority when you are living with no income.

Are you in jeopardy of losing your job, or have you lost your job? Did this blog help you reconsider how to live wisely? Leave your comments for others to learn from

Carly Sabato

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