Companies had to cut down on their staff strength during the economic recession, because of which many Americans faced layoff during this period. The recession is now over and the employment market is picking up. But it is still advisable that you keep yourself prepared for the possibility of a layoff if your company is not doing too well. You do not want to be caught off guard if you are suddenly fired from your job.
Look after your emergency funds
My first advice is that you build an emergency fund by keeping three to six months of expenses in a place where your money is easily accessible and you get an interest on it.
If you find it difficult to save money, then you should opt for automatic transfer of money from your checking account to savings account. The most important thing is that you do not touch the money in your savings account unless you fall upon really bad days. They will come in handy when you are out of work.
Maintain some additional reserves
If you are laid off and do not find work for a long time, then your emergency fund will not be sufficient. You need to establish some lines of credit like a credit card or a home equity credit that you will only draw upon when you are fired and do not have a source of income. It is better to get these reserves while you are working because lenders will be more willing to give you credit while you still have a job.
Keep your debt obligations in check
High-interest debts are the biggest reason for bringing unemployed people close to bankruptcy. When you are getting a steady income, you should take steps to reduce your debt. Make payments beyond the minimum level for your credit cards and keep up-to-date with payments on your mortgage loan. The advantage of debt reduction is that you will not only have lower burden when you are laid off, but also have lesser interest to pay overall.
Use your benefits
When you are working, there will be various benefits available to you at the cost of your employer. Draw on these benefits as they will be useful later. For example, if your company pays for giving you job-related training, you should take those classes for improving your resume. Also, put enough money in your 401(k) account to take full benefit of your employer’s contribution.
These simple tips will ensure that you can still keep your head above water when you find yourself without a job.