Being laid off is obviously a crisis situation for most people-both an emotional and financial loss at the same time. The scramble to find a new job while dealing with impending problems can be extremely stressful, putting a strain on family relationships as well. So what can you do to protect yourself or soften the blow when a lay off does occur?
My dad worked at manufacturing factories as I was growing up, so I was quite familiar with what a lay off was before becoming an adult. He does not mind me telling this, but one of my dad’s biggest mistakes was assuming his jobs were secure. I don’t blame him for that-he grew up during a time where my grandpa had the same job for 30 years and retired with a nice pension. Unfortunately, that rarely happens for people now-no matter how great of an employee they are.
Most people realize that in the back of their minds, but there’s also the element of it’s something that always happens to other people, not you. This is why some people are caught off-guard, especially when a job has lasted 5 or more years. I was still surprised right out of college when a job I really liked was eliminated in less than six months due to a company merger. Here I was-college degree, near the top of my class, and a hard worker-and the job was just gone. Just like that. It wasn’t anything personal, but it still hurt for awhile.
Even if you believe you will never be laid off, you need to save a small portion of your income every paycheck-anywhere from 5 to 10 percent until you have a decent safety net built up. People who do not make this preparation often end up living on credit cards, which long-term causes even bigger financial problems-with or without a new job. If you have currently have a lot of debt already, take the time to read some books that will help you reduce or eliminate it-I personally recommend the author Dave Ramsey. This will save you a lot of stress if all you have to worry about are your basic expenses to live-some people find getting out of debt hard, but it’s well worth some short-term sacrifices.
Another thing you can do while you still have a job is develop “back-up” incomes on the side. This is what I did starting at the age of 19. The Internet has opened up business to a lot of people who normally wouldn’t have time to create a traditional business. It still takes time, but you can create businesses with income that will still come even if you’re laid off. I look at it this way-in investing, people tell you it’s bad to put “all your eggs in one basket” yet people do that with their jobs all the time-you’re betting your entire finances on one income source.
This helps with the emotional aspect as well-if you really liked your job, it’s going to be depressing trying to job search without doing something. An emergency job is not a bad thing to do to keep your finances more stable, but it takes away your time to search for what you want. I’ve found working on a small business can keep your attitude up while you move on to something new. After 5 years of this, my side-businesses have equaled the income a lot of people make at their jobs. My husband loves his job and still works, but I’ve nearly turned our “job insurance” into a career. It’s funny how things like that can happen. The best place to start is just by looking at what you’re passionate about and brainstorming ideas of how that can fit into a business. You’ll find that the right idea won’t cost you a lot of money. All of my businesses took less than $200 each to start.
If you are caught off guard without any safety net, the first thing you need to do is take a few hours to calm down before making any major financial decisions. If you’re married, sit down with your spouse and try to plan how long your current money will last and how much time you have before you need some sort of income coming in. If you’re on the other side of things and it’s your spouse that’s laid-off, be there for them emotionally because they’re likely afraid, frustrated, and just feeling bad that it’s happened. From a financial standpoint, pay necessities first-it’s possible to catch up on everything else when you’re income is back up.
Finally, just be sure to realize that your self-worth as a person is not tied to any particular job. That can be difficult at times, but it will help you long-term. People in my generation are going to have to use more of our own creativity to survive financially than rely on any particular company. That doesn’t make companies bad-it’s just that there’s a lot of things now that they have to do to survive as well. If we realize that and respect that fact, life can be a whole lot less stressful. Being laid off does not have to be a completely negative experience-the change may help you discover things about yourself and your abilities that you never would have known otherwise.