The job market is fickle, and no one is immune to layoffs. Although the unemployment rate in the United States dipped to 4.9 percent in June 2016 and Canada's rate hovered around 7 percent in May 2016, the job market remains somewhat unpredictable. Preparing financially for unemployment can be prudent, even for working professionals who do not anticipate being laid off.
Financial advisors recommend adults save the equivalent of six months' salary to cover their expenses in the event of job loss. Individuals who want to protect themselves and their assets in the case of job loss can also heed the following tips.
- Examine current finances. It's important to have an accurate assessment of your current financial situation. Calculate monthly expenses to get a handle on what you are spending. Compare those expenditures against your savings to see if the latter can keep you afloat should you lose your job. Look for areas where you may be overspending, even cutting out some luxuries if you suspect a job loss is looming or just want to build your savings.
- Begin budgeting for loss of health insurance. Health insurance coverage typically ends when a person is laid off. Loss of coverage might not be immediate, but it may occur within months of a layoff. Health insurance is a considerable cost, and you will need to budget for the expense so that you will have access to the health services you need.
- Research options in government benefits. Few people like the prospect of visiting the unemployment office after being laid off, but delaying the process could negatively affect your finances. It can take some time for unemployment claims to be processed, so apply as soon as possible after losing your job.
- Find ways to supplement your income. Bringing in any money can be helpful. If it is feasible, look for ways to make some cash while you search for a new job in your field. This may include working from home, freelancing or selling items online. Consider part-time work while you look for a job. You may prefer to find temporary or part-time work in your field, but your hobbies and other interests may present income possibilities as well.
- Practice living with less. Cut out unnecessary expenses and attempt to live with less. You may find that this comes easily and continue to do so even though you remain employed. Such a trial run can bolster your savings in the event of layoff while also acclimating you to living with less should a layoff ever occur.
- Don't burn bridges. While it's understandable to harbour some resentment toward an employer for letting you go, that same employer may be able to help you in the long run. Supervisors can help you find a new job or write glowing recommendations. Staying positive and resisting the temptation to badmouth a former employer can only help you in the long run.
Losing a job is seldom easy and is often unexpected. But there are steps adults can take to prepare for losing their jobs.
- Metro Creative