My wife is in the middle of a possible layoff right now, and as anyone who has been through this knows, it's a hard situation to be in. So often a big chunk of our self worth is tied up in what we do for a living, and then when the rug is pulled out from under you, it can be so tough to bounce back.
I feel very blessed because in the past year or so we have really gotten our financial house in order.
We're debt free except the house and we've been saving cash in our emergency fund for just such a rainy day. We've implemented a budget and have learned a lot of solid financial principles through our Financial Peace University class. Because of all the hard work that we've done, we're ready for a layoff. It won't be fun, but because we've planned ahead, we'll be ok.
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Planning Ahead For A Rainy Day
So what can you do to plan ahead for the possibility that you may be laid off sometime this year? Here are some of the steps that we've taken in the last year.
- Stopped spending more than we make: We've setup a budget, and we know what we're spending and when. We make sure that we're never spending more than we make – we're able to save every month.
- Stopped using credit cards: No more paying for things on credit. We save up and pay cash, and never end up having to pay interest.
- Set up a zero based budget: we setup a zero based budget so that every dollar had a job whether it was paying for utilities, the mortgage, or going into a savings account.
- Saved $1000 emergency fund: We saved a baby emergency fund of $1000 for those small emergencies like car repair, smaller doctor's visits, emergency vet visits, etc.
- Paid off all debts except our mortgage: All of our student loan and auto loan debt has been paid off. Without it we feel so much more free!
- Started saving 3-6 months of expenses: (we're over half way there!) We're saving up 6 months of expenses in case something like a layoff were to happen. Having the cushion saved really helps us sleep better at night.
- Put 401k on hold to stash even more cash just in case: (no company match): Once the economy soured and we realized a layoff might be imminent we stopped contributing to my 401k (no match) and started stashing cash away faster. I'm glad we did.
Those are just a few of the steps you can take to plan ahead. Set up a budget, pay off your debts, and save an emergency fund. Simple, but effective.
After The Axe Falls
Once the downsizing has happened, and you're out of a job, what's the next step? Here are a few things you need to remember to do.
- File for unemployment: (Do this if you can. My wife works at a church so she can't.) If it takes you a while to find a new job, unemployment can help fill the gaps until you find something new.
- Brush up your resume: It may have been a few years since you needed your resume. It's time to brush up on it now! Add your last job to the mix, adding concrete accomplishments that you've achieved at that position. (As mentioned below by cashmoneylife.com, it's usually best to brush up your resume and network before you get laid 0ff – planning ahead. )
- Network: Tell friends and family that you're looking for a job. Chances are they may know of something that's opening up, or may be able to direct you to a company that's hiring. If you have social media contacts on twitter, facebook, linkedin and other places, try connecting with them to see if they know of anything available.
- Ask former co-workers and boss for a reference: Call up former co-workers and you former boss. Ask them if they'd be ok with providing you with a reference. While you're at it ask if they know of any other open jobs!
- Start cutting back: In an economy like we're in right now, you may be in for a longer time without a job than you've bargained for. Start cutting un-necessary things out of the budget (like cable tv, starbucks every morning, etc). Cut down to the bare necessities, at least for now.
Don't Worry, Things Will Turn Around
Try not to stress too much over losing your job, you're not the only one going through a tough time, and things will get better. As a Christian I also know that God will never give me more than I can handle – he will provide:
And my God will meet all your needs according to his glorious riches in Christ Jesus. Philippians 4:19
Treat getting a new job as your new job, and you'll have something just as good, or better, in no time!
Helpful Resources For When You've Lost Your Job
It's tough dealing with a downsizing. But you're tough too! Here are some other resources to help jumpstart getting back on your feet. Even if you're not expecting to be laid off, why not be ready just in case?
Layoff Proofing Your Job
Planning for Layoffs
- Does Your Family Have An Emergency Plan?
- How To Worry Less About Your Finances
- How To Write A Resume That Lands Job Interviews
- Are You Ready To Lose Your Job?
- I Was Laid Off Yesterday
- I Just Got Laid Off
After You've Been Laid Off
- Got Laid Off? What To Do When You Lose Your Job
- Unemployment Benefits – How to File and Other Frequently Asked Questions
- Surviving A Company Layoff
- Surviving Job Loss
- How to Make Ends Meet When You Can’t Find a Good Job
- What To Do With Your 401k When You Get Laid Off
- 401K Rollover
- Dealing With Losing A Job
- What To Do When You Lose Your Income
- Making Ends Meet When You Can't Find a Job
Finding A New Job
- Job Interview Techniques: Preparing For Your Interview
- Find A New Job On Twitter!
- 6 Words That Make Your Resume Suck
- 10 Improvements You Can Make To Your Resume Right Now
- The Best Job Hunt Post: Top 40 Links From The Web
- 10 Things Not To Do During An Interview
- 10 Things To Do When You're Looking For A Job
- How To Show You're The Right Person For Any Job
- 5 Ways To Kick Start Your Job Hunt
- How To Successfully Find A Job
After You've Found A New Job
Dealing with a layoff or job loss is never easy. Hopefully my post, and some of the others I've linked will help make the transition to unemployment (and then a new job) easier.