How to Prepare for a Layoff
If you think your company might lay you off, take these steps to prepare.
You can't assess what a layoff will do to your financial situation if you don’t know what your financial situation is, so now's the time to conduct a thorough review of your finances and get them in order by setting financial goals, tracking your spending, creating a budget, and determining your net worth.
Start an Emergency Fund
If you've been meaning to set aside three to six months living expenses, but still haven't gotten around to it, now's the time to play catch up. Open a money market account or a high-yield savings account, and get that emergency fund going post haste.
Cut Your Spending
Create a Bare-Bones Budget
Make a list of your necessary expenses, and total them to determine how much money you really need to survive.
Get Rid of High Interest Debt
Transfer high-interest credit card debt to a low-interest card to minimize your debt burden. Then, form a plan to zap it as quickly as possible:
Stock up on sale-priced food and toiletries now, and you'll have plenty to fall back on later:
Consider Your Health Insurance Options
If your family's health insurance is attached to your job, you should start exploring your options now. Is your spouse eligible for coverage through his/her employer? Do you belong to any organizations that entitle you to coverage? How much would a private policy cost? What about COBRA? Does your state have a plan that you'd be eligible for?
Find Ways to Bring in Extra Money
Start Doing More for Yourself
Paying someone else to mow your lawn or change your oil may seem worth the cost when you have the money to cover it; but when times are tight, they should be some of the first expenses to go. Do more for yourself, and save more for yourself:
Plan for a Career Change
Don’t wait for disaster to strike before you start looking for a new job. Update your resume; develop new skills; reach out to friends and colleagues in your network; and apply for any job that interests you.
Know What You're Entitled to
Will you get a severance package? Will you be paid for unused vacation time? Will you be eligible for unemployment checks? How much will they be, and how long will they last? Research the answers to these questions now, and you'll know exactly what you're entitled to should a layoff occur.