I posted the other day about how you shouldn’t worry about losing your job. We shouldn’t worry about that. If it happens it happens, but there are definitely some things you can do to prepare for losing a job.
Some things to prepare for losing a job:
Save your money – I’ve talked about this before, but you have to save money. Build up an emergency fund of at least 6 months worth of expenses. Keep this money in an easily liquidated account like a money market or savings account.
Then build up another 6 months worth. You can put this into a CD or something less liquid, but you still need to be able to access it. When you have one year’s worth of expenses saved up, you can feel pretty confident that a job loss wouldn’t be the end of the world.
Live below your means – This goes along with saving your money. Don’t buy the most expensive house you can afford. Don’t buy new cars just because you can. Stop buying luxurious things. Save up that 12 month worth of expenses first before you splurge on things.
Don’t get into debt – Never buy things on a credit card unless you intend to pay it off in full every month. Credit cards ruin people’s lives. Save up to buy that new car or furniture. Or better yet, buy used.
If you are already in debt, start paying things off as quickly as possible. Some people say to pay off the higher interest loans off first and some prefer the debt snowball method. Whatever it takes, just pay it off. I’m currently trying to pay off my student loans. I realized that I spend over $100 per month paying these down. That’s a lot of money I could be saving if I didn’t have these loans.
Less debt means less monthly expenses. Less monthly expenses means less to worry about when you lose your job.
Buy a modest house – This goes along with avoiding debt. Most of us will want to buy a house and have a mortgage at some point, but we need to be sensible about it. I made the mistake of buying a house above my budget. You think you can afford more than you really can. The mortgage banks approve you for more than you can handle so you need to use some restraint when it comes to buying a house.
When you go to buy a house think about how much you would be willing to pay in rent. Don’t take out a mortgage with payments higher than that. It will depress you and make life more stressful. Remember that it takes a lot of work to sell that house. If you lose your job you may have to foreclose on it if you are stretched financially.
Learn to cook – Eating out is really expensive. If you lose your job you’ll want to cut this out entirely. Cooking is an invaluable skill, especially if you’re short on money.
Learn to garden – Like cooking, the ability to grow your own food will definitely come in handy if you’re out of a job. Start small and learn the basics. You can save a lot of money if you don’t need to buy vegetables.
Stay healthy – Eat healthy and exercise. Drink in moderation and quit smoking. There would be nothing worse than losing your job and getting sick in the same week.
Career Related Tips:
Diversify your skills – Take classes in things unrelated to your career. Learn things that will help you around the house. This can save you lots of money in repairs.
Take classes in things that can make you side money as well. You might not be able to find a job in your field if the economy turns south again. Learning a skill like bartending, carpentry, or welding could be extremely useful in the future. You may even turn it into a new career.
Stay in contact with people that can help you find a job – This may be the most important one on here. You have to network with people in your field. Stay in touch with old co-workers and employers.
If you do lose your job, contact these people as soon as possible. They may know of opportunities out there or may just be a good reference. Regardless, it’s who you know, not what you know.
Keep your resume up to date – Nothing is worse than having to write up a resume during a stressful time. If you lose your job, you’ll have enough on your mind that you won’t want to do this. If the resume is up to date you can start applying tomorrow.
I wasn’t this prepared when I lost my job. I really wish I was. Being prepared for the worst gives us the peace of mind to stop worrying about things.
I’m sure there are plenty of other ways to prepare. Leave me your ideas in the comments.