There are things you should do once it is clear you are going to be laid off. But what if there is some uncertainty about your continued employment? What then?
“I was told that my company is being bought out, making job loss a possibility,” wrote a woman who was worried about her job. “This came completely out of the blue as we are doing very well, though I guess that is why the larger company wants to acquire us. My boss wanted to give me a heads up, but he doesn’t know any details yet. I am the breadwinner in my family. How do I deal with this? Just save money as best I can, and not panic?”
Yes, don’t panic. You have to stay calm while at the same time going into what I call crisis mode, which means immediately taking an assessment of your financial holdings. Now is the time to become intimately familiar with your expenses. Start saving as much as you can.
“I am terrified to spend money,” the woman wrote. “We have two kids and an expensive mortgage. We don’t have as much in savings as I’d like because we’ve been paying off credit cards. In fact, I just paid $4,000 the day before I got the news. There is a chance I may not know about my job for weeks.”
As she waits to learn her employment fate, she should suspend any aggressive debt payoff plan and just make minimum payments. It’s definitely important for her to cut expenses as much as she can and hoard cash, especially if there is a low balance in an emergency fund.
As an extreme measure, she might also consider suspending contributions to her retirement plan. Right now, while there is so much uncertainty about her employment, she needs to prepare for possible months without income.
“Should I start looking for a renter for our home?” the reader asked. “Should I look for another job? I have already applied for one other job, just in case.”
Not yet and yes.
The largest expense for most families is their rent or mortgage. If you can’t or you’re not willing to move to cut costs, you should consider whether you have the room to bring in a boarder. You can certainly start clearing space in your home and asking around for possible roommates. But just wait to see if this step is necessary.
It’s definitely wise to start looking for an exit if you’ve been told you may be shown the door. You can always turn down a job offer. Even if you aren’t laid off, you might end up finding a better, more secure job.
So then the worst does happen. You lose your job.
Once you’ve found a new job, hit the reset button by taking the time to develop a good savings strategy. Start with continuing to live, at least for a little while, like you did when you weren’t working.
If you’re worried about losing your job, cut your spending and start saving as much as you can