In times of economic uncertainty, or due to performance or work dynamics, you might get to a point where you start to worry about losing your job. The loss of a job can be extremely stressful and can also create a lot of financial hardship.
If the thought "I'm worried about losing my job" has crossed your mind, it's time to create a plan to minimize the financial impact in the event that you do lose your job.
Constant worrying can cause physical and emotional stress and in turn, inhibit your ability to take strategic action before anything actually happens. Creating a financial plan is one way to help manage your fears and reduce stress and anxiety about a job loss.
Here are some key money tips to help you ease the transition until you find new employment if you do happen to lose your job.
1. Start bulking up your savings
The first thing you want to do if you are worried about a potential job loss is to start saving as much money as you can while you are still employed. Studies show that people who have access to financial resources cope better with the overall impact of job loss.
This is because when you are less worried about finances, you do better from an emotional and mental health perspective. So it's important to prioritize the importance of savings.
To bulk up your savings effectively, it's important to lay out all your expenses. You also need to determine how much it costs each month for you to survive. A good starting point for how many months you should save for is 3 to 6 months.
As you determine what this amount is, also consider what things you can cut back on to minimize your expenses during the period you may be unemployed. This would include any non-essential spending and purchases that can be put on hold until your job situation is more secure.
2. Begin the process of looking for another job
The next step of taking strategic action is to get ahead by beginning the process of finding another job. Carve out some time to update your LinkedIn profile and make your resume attractive to employers.
You can also start doing research on companies and positions you can apply to. If you need assistance updating your resume or preparing for interviews there are several amazing websites with career advice that you can leverage. Be sure to check out our list of the best recession-proof jobs.
Don't forget to dig into your professional and personal network to let people know you are looking for work. You never know who might give you a lead to help you find a new job.
3. Take advantage of current employment benefits
If you have employee benefits that you can use, make sure you use them. For instance, leverage your health insurance coverage to get any medical concerns you have attended to and fill your prescriptions.
Choosing multi-month over monthly prescriptions if possible can save you a ton of money and carry you over while you are unemployed. You can ask your doctor about this option.
Healthcare can be a massive out-of-pocket expense. So you want to make sure that if you have benefits to use, you actually use them if you need to before you lose your job.
Be sure to find out what the options are to extend your healthcare coverage after you are laid off.
Also, if you have accrued vacation or sick days that you haven't used, you can find out how this is handled for employees who are laid off. There might be a payout for the unused days and you can put this money towards your emergency fund.
4. Find out what is required to file for unemployment benefits
Unemployment benefits are intended to replace lost wages in the event that you get laid off and qualify to receive this benefit. Formally known as unemployment insurance benefits, this benefit covers workers who have lost their jobs through no fault of their own and meet certain other eligibility requirements.
You can determine the qualification requirements for unemployment by visiting the website for your state's unemployment insurance benefits. Your state's website will also provide you with specific details on how to file.
5. Explore additional sources of income
- Looking through things you own that you can sell online for cash
- Finding a part-time job including jobs you can work from home.
Keep in mind that in order to stay afloat, you might need to take a job below your skillset or work multiple jobs and that's ok. There's no shame in doing what you need to do to bring some cash in before you find another job.
Thinking about losing your job can be scary and stressful but with a plan in place, you'll be better positioned to weather the worst-case scenario.
Don't allow yourself to get stuck at a standstill of fear and anxiety due to overthinking the situation. Instead, plan ahead for the worst and hope for the best. It will give you the peace of mind that you will get through any temporary impact of a potential job loss.