How to Prepare Your Finances for a Layoff-Click Now more information

How to Prepare Your Finances for a Layoff There are indications that the labour market might not be as robust as the stats claim it is, despite the fact that the unemployment rate in the country is still very close to record lows. There have been a number of high-profile layoffs reported in recent weeks across a variety of industries. These announcements have come from companies such as Snap, Best Buy, and Goldman Sachs. How to Prepare Your Finances for a Layoff

According to the results of a recent poll conducted by PwC, a full half of firm leaders report that they want to reduce the number of employees they employ this year.

If you are worried about getting laid off or not, taking some preventative measures with your money now can help protect your finances in the event that you become unemployed. This will allow you to concentrate on finding your next job rather than being concerned about how you will continue to pay your bills.

Connor Spiro, a senior financial consultant at John Hancock, believes that it is always preferable to be proactive rather than reactive. “Think of it as a stress test for the very worst possible outcome.” How can you prepare yourself to deal with it in the most effective way?

The first thing you should do is look at your budget right now and eliminate any unnecessary expenditures, such as going on vacation or eating at restaurants. Proceed with the procedures that follow after you have some spare cash in your possession:

How to Prepare Your Finances for a Layoff

  • Start putting money aside for unexpected costs.
  • Reduce your debt payments.
  • Consider a secondary hustle.
  • Reestablish your connection with the network.
  • Make sure you have a strategy for your health insurance.
  • Create a Savings Account Just in Case

The common recommendation is to have three to six months’ worth of living costs readily available in case of unexpected needs. If you are concerned about being laid off, increasing the amount in that account so that it covers six months to a year’s worth of costs may provide you with additional financial cushioning while you search for a new job. How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff

How to Prepare Your Finances for a Layoff

Cut Down on Your Monthly Debt Payments

If you carry a balance on a credit card that has a high interest rate, paying off that debt will only get more expensive as interest rates climb. Paying off that debt, transferring it, or consolidating it into a loan with a reduced interest rate should be your first focus.

Isabel Barrow, director of financial planning at Edelman Financial Engines, advises that “what you don’t want to do is go into a job loss or reduction in (compensation) with large credit card bills that you’re not able to pay.” “What you don’t want to do is go into a job loss or reduction in (compensation) with large credit card bills that you’re not able to pay.” How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff

Consider a Side Hustle. How to Prepare Your Finances for a Layoff

You may increase your income by engaging in a side hustle, in addition to freeing up money for yourself by reducing the amount of money you spend. This may be freelancing or consulting work in your profession (provided that your company allows you to do so), a hobby that makes you some additional cash, or gig work such as driving for a rideshare or for a food delivery service. If your employer allows you to do any of these things, you have a few options.

Reestablish Your Connections With Your Network.

If you took a break from attending events related to your industry while the epidemic was going on, now could be a good time to start going back. If you need to reestablish such contacts, checking in with former coworkers or classmates who are now employed by different firms may also be a wise move for you to do at this time. In addition to assisting out with career chances, your network may provide you knowledge into your sector, including compensation levels and the qualifications for roles in which you might have interest. How to Prepare Your Finances for a Layoff How to Prepare Your Finances for a Layoff

According to Shawn Tydlaska, a fee-only certified financial planner and proprietor of Ballast Point Financial Planning in San Francisco, “Make sure that your abilities and your LinkedIn profile are up to date.” “In the event that you are let go from your job, you will still be employable.”

Make sure you have a strategy for your health insurance.

If you are terminated from your job, the employer will no longer pay into your health insurance plan on your behalf. It’s crucial to preserve coverage, and you may be able to do so under the Consolidated Omnibus Budget Reconciliation Act (COBRA), which enables you continue paying for the health insurance you acquired through employment.

The loss of a job is considered an eligible event, and it may be possible for you to obtain health insurance via the workplace of a spouse or through the public marketplace without having to wait for open enrollment.

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