Preparing for a Job Loss
One of the main reasons I’m pursuing a self-sufficient life is the realization of how dependent I am on being employed. “Well, isn’t everybody?” Mostly, yes. With exception of the independently wealthy, the retired, the imprisoned, and those on government assistance, we all need gainful employment. We need an income and, generally, that is achieved by performing services for which an employer pays you.
At the end of the year – in less than a month – the contract at my current gig is ending which means I have to look for another job. Just after I started writing this, the company I’ve been working for reduced their workforce by 450. A lot of people are out of a job and I will be, too, if I don’t line up something soon.
Fortunately, I have time to look for something. I’ve been in the position where I wasn’t prepared and had to scramble to find a new job immediately. Earlier this year, I knew we were not prepared financially for job loss so we started to take steps to become more stable by going through Financial Peace University, an excellent program developed by Dave Ramsey which teaches “God’s and grandma’s ways of handling money”. That class started on Sunday and on Friday I suddenly lost my job. I felt like we were finally getting on the right track and were excited about being more responsible. Five days later were delivered a devastating blow and we weren’t ready for a disruption in my income stream. I secured a job quickly and started my current job three weeks later.
Since February, we’ve been working toward financial stability and are in a better place than we were but we have a long road ahead of us.
Here are some tips – financial and otherwise – to prepare yourself for a job loss.
Keep an eye out for changes in your company. Is there steady work? What about changes in the industry your company is in? What to watch out for will be different for every company, organization, and institution. Keep your mental receptors active and be aware of changes or circumstances that could result in a workforce reduction.
Have or Begin an Emergency Fund
Build a cash reserve that you only use in case of an emergency. A job loss is an emergency but it doesn’t have to be catastrophic. Having money in the bank, inside your mattress, or in coffee cans buried in the yard will help bridge the gap between jobs. When you have no income from an employer, you can still pay your mortgage and utilities and buy groceries and gasoline. If this idea is new to you, please check out www.daveramsey.com and check out his Financial Peace University program or his Total Money Makeover book to learn the “7 Baby Steps”.
Here are some quick tips to pile up cash while facing a job loss…
- Make a list of things to sell. In fact, sell them now and turn those unwanted items into cash.
- Pay minimum payments on your debts. Come back to your creditors later. Food, clothing, shelter, transportation, and utilities are more important.
- Adjust your budget to redirect money to savings. When I lost my job earlier this year on a Friday, on Tuesday I took my cable box back to the cable provider. I determined $100 a month was more important than having hundreds of stations of programming we hardly watch. Full disclosure: I kept our Netflix and Hulu subscriptions.
- Hold off on unnecessary purchases. Save the money and use it for emergencies. If you don’t need it for the emergency you’ll have it to purchase the item once your income stabilizes.
- Take a temporary side job. Take an off-hours cleaning job, deliver pizzas, take a seasonal job at a retailer. There are a number of things you can do to earn extra money for the short term.
Do you have other tips to quickly earn cash (legal only, please!), be sure to comment below.
Keep Your Pantry and Freezer Full
One thing that helped us earlier this year when I was out of work for a few weeks was we had a well-stocked freezer. By the providence of God, Steph had made several meals ahead of time and put them in the freezer. We were able to get by on the food we had in the house without having to spend much money at the grocery store.
Keep a stocked pantry and work toward increasing the amount of days/weeks/months worth of food you have on hand. Have a buffer of food stored so you can live off what you have to conserve your money. If your family can cook from scratch, you can save money buying your food supplies in bulk. Buy in bulk and keep a good supply on hand at all times. You may deplete your supplies when you’re out of a job but that’s the idea. You can resupply when you get a job.
Be Ready to Make the Next Step
If you’ve been at the same job for years, chances are your resume is out of date. One of the first thoughts that will cross your mind after a sudden job loss is, “I need to update my resume!”. You will, potentially, spend a significant amount of time locating a digital or hard copy of your resume and adding new skills and recent job responsibilities to it. This is time you could be spending talking to recruiters, scouring employment sites, and sending your resume to potential employers. You might not be in the right frame of mind after you lost your job to use your best wordsmithing skills. You might not recall all the details of those big projects you tackled months or years ago. Update your resume often when the project is fresh in your mind and your brain isn’t preoccupied with the stress of being unemployed.
If a potential employer doesn’t have any open positions or the interview didn’t result in employment (either they turned you down or you declined the offer), maintain a friendly relationship with the company and the hiring manager. Set yourself up for opportunities in the future if, God forbid, you are in the same position and are looking for work. If you’re facing a job loss now, who did you interview with when you landed this job and which companies did you contact? If you’ve maintained a good relationship with those contacts, you already have your foot in the door.
I’ve done this exact thing with a company I interviewed with earlier in the year. The manager called me to offer me a position but I had accepted an offer elsewhere the day before. I’ve kept in touch with the manager occasionally over the last several months and there is an open position and my foot is in the door.
Ultimately, I don’t want to be in this position. I don’t fully understand what it means to live a self-sufficient life and what it takes to accomplish that but I think it doesn’t involve having your job and income stream terminated because of things happening on the other side of the globe. However, we are not to that point yet so I am on the job hunt, hopefully moving one step closer to opting out of the rat race.