10 Tips to prepare for a layoff
The shaky economy has many employees fretting about their futures. Even if you think your job is secure, you’d be well-advised to prepare for unexpected job loss. Here are 10 things you can do now to be prepared in case you do get laid off.
How to prepare for a layoff
Build an emergency savings fund
Most experts recommend socking away from three to six months worth of basic living expenses (rent or mortgage, food, utilities and so on). Stash these funds in a high-interest savings account or short-term CD.
Cut your debt – now
Pay down or pay off any high-interest credit card debt you have. If that isn't possible, transfer it to a low-interest card or possibly even take out a small loan, provided it has a lower interest rate, to pay it off. Then pay that off.
Reduce your expenses
Now is not the time to live beyond your means. Don't put that Dooney & Bourke bag on your credit card, plan an expensive vacation or begin a home remodeling project. Ask yourself before you purchase something: If I get laid off, will I cringe when I see this on my credit card statement? Also consider the budget items you can trim, like premium cable packages or frequent meals out. Reducing your expenses will help you pay off your debt and build that emergency savings fund.
Network now. Keep in touch with professional contacts and friends through social media, email and phone. Attend professional functions you feel offer a good opportunity to make new contacts or strengthen old ones. Keep in mind that networking goes both ways -- be willing to help others when they need it, and they'll be more likely to help you.
Plan for insurance coverage
If you lose your job, what will you do about health insurance? Will your company's exit package include continuation of your health benefits? If not, consider keeping your coverage through COBRA, a federal law that allows many employees to continue under their employer's group coverage, provided the employee pays the premiums. (Remember, though, you will now have to pay your employer's share of the premiums as well as your own.)