Hopefully, you’ll never have to use it, but if you financially plan for a job loss now, it could make the blow a bit easier when and if it comes around. At least financially.
This year hasn’t been great for a lot of businesses which means that, unfortunately, a lot of people have lost their jobs. Many of those people were not financially prepared for that to happen. Whether or not you have a stable job, it’s important that you’re prepared for the worst.
In the best-case scenario, it won’t happen. But at least if it does, you’ll be well-prepared.
Tip #1 Build an Emergency Fund
Your best bet to financially plan for a job loss is to have an emergency fund set aside for when and if you need it. This doesn’t help if you lose your job tomorrow and have nothing saved. But if you start saving now it could help you a lot in the future.
When it comes to building an emergency fund, sources vary. But most say that you should have about 6 months of expenses saved for emergency use. You want these to be easily accessible but not too easy that you’re tempted to dip into them from time-to-time.
Tip #2 Stick to a Budget
Chances are, your budget will have to fluctuate depending on how much money you currently have coming in. But being able to stick to a budget will help you financially plan for job loss in the long run.
Being in touch with your budget can help you make sure that you can adjust when times get tough and actually make it work. You’ll also want to make sure that you are prepared to cut expenses that you don’t need.
In fact, it’s a good place to check-in regularly with your spending and see if there are areas you can cut. Practicing cutting costs can help you adjust more easily when it comes time to financially plan for a job loss.
Tip #3 Keep Your Resume Up-to-date
This might not seem like a key tip when it comes to how to financially plan for a job loss but it’s a legitimate one (I swear).
One of the first things you’ll want to do after losing a job is to get a new job. It’ll help you become more financially stable much faster. But that can’t happen as quickly if you don’t have an up-to-date resume. And, honestly, most people don’t keep their resumes up-to-date.
So, while it might not sound very financial, it’s a crucial part of your get started quickly plan. And that will help when it comes to financially staying afloat.
No one can really predict when and if a job loss will come, so it helps to have a little preparation ahead of time.
How do you financially plan for a job loss? Share your tips in the comments below!