If you lost your job today, would you be okay financially? If you’re like millions of other Americans, you’re probably not financially equipped well enough to handle the sudden loss of income. I recently discovered that a friend of mine recently quit her job due to high stress and overwhelming hours. She quit without having any other opportunities to fall back on. However, she is fortunate enough that her husband still brings in the bulk of the household income so she is in no hurry to find another job. Many other Americans who have recently lost their jobs can not say the same thing about their situation. Sadly to say, they need to adjust to the new circumstances.
Things To Expect After Loss of Income
Cut Expenses. Money will probably tight if you’re in this predicament, so you will need to cut down on the some of the things that came at a leisure. Cable tv might be one of them. If you have internet and cable, that can run you almost $100 every month. By canceling both, the savings will add up over the months. For free internet, you can go to internet cafes which are becoming more widespread these days. Also, public libraries now offer free internet to visitors.
Be Productive. Work on your resume and submit them to job sites every day. One friend who lost his job last year spent hours in the library, researching and submitting resumes. He just seemed busy all the time, every day. I was impressed that he was very so diligent and active in his job search.
Find Temp Jobs. Keeping yourself busy and occupied is very important. Many hiring managers actually do not like to see any gaps between jobs in resumes. They want to see that you have been active and productive even during the times of unemployment. Working part-time or as a temp can fill that void and also bring in some income while you need it.
Protect Yourself From Job Loss Now
Emergency Fund. You can create a fund for emergencies. Whether it’s for unexpected car repairs or health-related costs, having a fund for emergency purposes can really bail you out of a tough financial spot. Losing your job definitely fits in this category as well. Calculate what your normal monthly expenses are and try to maintain about 8-10 months of savings in the emergency fund. That way, you will have 8 months to find a new job if you were to become laid off. Although unemployment rate has been decreasing as of late, the average unemployment length is still around 8 months.
Gather Contacts. I’ve collected so many business cards over the years working professionally. I still have contacts from my first job 10 years ago. If I were to lose my job tomorrow, I can always use some of these contacts to inquire about any job openings. Save those business cards and keep them safe.
Diversify Income. If you only have one source of income, then you’re not taking advantage of all the resources that are available to us. There are so many ways and methods to earn a few dollars using the internet. So you can start an online business such as a blog. MoneyGreenLife.com has been a nice supplemental income for my household over the past couple years of its existence. Also, my wife will finish school in May, 2012 and will start working soon after. The secondary income from her will also help.
Have you been in this tough spot lately? How did you handle it? What lessons did you learn?
photo: morguefile.com
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{ 15 comments… read them below or add one }
I’d liketoemphasize the emergency fund, 6 months is a minimum to have as government unemploymeny will barely pay for your food. Also, don’t forget toget in touch with your university even if you graduated 10 years ago, they often offer placement help to their grads.
BeatingTheIndex recently posted..Palliser Oil & Gas: Rejuvenating Old Oil Fields Using a Game Changing Methodology
I was in this position a few years ago. Having a hefty savings account definitely makes things a lot easier to handle. It also gives you an indirect benefit that you can search for the RIGHT job, not just any job. If you are strapped for cash and you get an offer for a salary that’s lower than you want, or a job that you really don’t want to do, chances are you’ll take it, whereas if you have a cushion, you can actually say no and make sure to find something that suits your needs.
Money Beagle recently posted..We Need A New Dishwasher
that’s good point too. we need to be mentally prepared to take worse jobs than we had before. whatever it takes to meet ends.
We try to have a good amount of savings in place so that we are prepared if something happens. We also try to network well so we have some contacts if the need arises to find another job.
Miss T @ Prairie Eco-Thrifter recently posted..The 4 Biggest Myths about the Stock Market
Good tips, I am meeting the first two. I need to heavily diversify my income now. My emergency fund can sustain me for up to 1 year, then I have to cut back from retirement saving. Hopefully I’d have something to work on in one year.
SB @ One Cent At A Time recently posted..What to Do When Automobile Repairs Go Wrong
yeah it’s smart to think about worst case situations. save where you can to avoid paycheck to paycheck life.
Creating an emergency fund helps relieve the pressure that comes along with losing income. Too many people are living paycheck to paycheck without enough job security. Exploring personal interests that can be used to generate income can be fun.
i agree with you 100%. i keep encouraging friend to find alternate sources of income now while they can.
I would be fine today if I lost my job — just sad that our mortgage pay off might be slower. Then again, it might not be, because I’d have a lot more time to work on my side business.
I can’t stress the importance of building up a very LARGE emergency fund and cutting back your required minimum expenses as much as possible in case of a job loss. Back after 9/11 I lost my job and was unemployed for 4 years. That actually turned out to be a great thing though, because I learned to live on so little that it put me on the path to financial freedom.
Jackie recently posted..The Lazy Person’s Guide to Creating a Budget
good job. tough situations definitely help us grow in character. i’m glad you were able to recover from your setback.
I am currently not really protected from job loss as I recently paid off partial loan using my emergency fund. I have started building it back again… It best to build that other source of income besides your primary income from your full time job.
UltimateSmartMoney recently posted..6 Tips to Limit Winter Hazards for Your Home
same here. but at least we know what to do about it now.
Never experienced one yet, but maybe someday.. and when that day comes, I will work on the Yakezie Network fulltime!
Financial Samurai recently posted..Is Discrimination OK If You Aren’t Being Discriminated Against?
I have been doing everything possible to diversify my income, meaning adding more sources of income. I also have an emergency fund and my wife also works so we are protected in many ways.
20′s Finances recently posted..Weekend Wrap Up – Exciting News Edition
I am a subscriber to Jack Welsh’s philosophy of do not quit your job unless you have a new one lined up. In this economy “quitting” your job without having another job makes it look like you were fired.
Super Frugalette recently posted..We have 1.2 cars…how many cars do you have?
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