What to Consider When Facing a Loss of Income

job loss

Most of us at one point or another have faced a potential job loss. With the government shutdown, it has once again jumped to the forefront of American’s minds. What would you do if you suddenly were faced with possibly losing your job? Would you be prepared financially? Would you know how to prepare for that day when it came?

Financially, the answers are familiar. You have to prepare for such occurrences ahead of time even if you don’t suspect such a thing. The problem is, many people can’t afford to do such things or don’t have the knowledge to do so. Here are some tips that can help you prepare financially for that possible day when your job is gone:

Don’t Wait For the Axe To Fall

Most of us are fairly in tune with the pulse around the office. If you suspect that something is possibly coming, you are probably at least half right. Many people suspect such things ahead of time and then sit back and wait to see what happens. Instead, be proactive in your approach.

Start doing many of the things on the list below to prepare for danger ahead of time. If you heard a tornado was possibly heading your way, you would not sit there and hope for the best, right? Prepare for the worst and you will be better off.

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Find lots of ways to save in our Everyday Savings Tips series.

Start From Square One

Once you know the job loss is coming, you need to completely revamp your budget. Your budget should reflect what you see coming and not what you are currently living. Why live like you have a job if you know your job is about to be gone. You should instead be working on living simpler. This leads us to….

Read more tips on what we did to evaluate our finances during a job loss.

Trim… Then Trim Again

Look at how you live and eliminate all the things that are frivolous or unnecessary. Until you have one year of emergency fund that covers everything you need, you should be in saving mode. Get every dime put away that you can and keep only the things that you need to survive.

Once you have trimmed your budget, trim it one more time. There will be time later for frills. For now, take care of business and protect your family.

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Find several legitimate ways to make money.

Get That Part Time Job

If you ever felt the need to get an extra job, this should be the time. When you are working a tight budget, even an extra fifty bucks per week can make a huge difference. Anyone that has burned the midnight oil trying to find that extra ten dollars in the budget for lunch money knows how good a part time job can be.

Clear All Possible Debt

Another great strategy is to start trying to eliminate all debt that has interest or charges attached. The last thing you want to do when you are jobless is throw money into the bottomless pit that is interest. If you know a job loss is impending, try to clear what you can right away.

Network Immediately

Networking for the next best thing is something that can benefit you anytime, but during times like this it is a must. Getting the word out can land you a job quicker than anything. This is especially true in niche type job markets, but networking can help anyone. You have to replace that job to keep the finances rolling, so this is the best place to start.

All of these things will help you get started, but it will take continued efforts to keep your head above water. Finding ways to generate money while you are unemployed will be vital to your success. Try to prepare ahead, but it is never too late to start.

What has helped your family prepare for a loss in income?

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