How to Prepare for a Job Loss Right Now

We can wring our hands and worry about an imminent job loss, or we can take steps to ease the transition to unemployment, fewer working hours or taking a lower paying job.

We'll skip the unreal tips we get from financial planners. What we need are tips to keep a roof over our heads and a healthy meal in our tummies.

You have been working for one company for years. Perhaps it's a corporation who does not share any news with you at all. Or perhaps its a smaller family run business who has called a meeting. They are honest with their employees and say that if sales targets aren't met, they will have to lay off a percentage of their staff this coming spring. You can cry and commiserate about it over the water cooler but when you get home, start a real plan.

What are the most important ingredients for you to survive? Unfortunately in our monetary type of world now, a roof over our heads is more important than getting three square meals a day. Whether it's rent or a mortgage, these will have to be paid for first. If you are renting, is there a way for you to downsize? Can you rent a one bedroom apartment instead of a two bedroom apartment? Can you have a garage sale and sell off the clutter and put it into a savings account for a rainy day? If you have a mortgage, check and see if you have mortgage insurance, which will pay your mortgage while you are out of work. Can you get it now? If not, how flexible is your mortgage? Call your provider and ask if you can adjust your mortgage by 25%. If you have spare rooms, perhaps you can take in a boarder to help the house pay for itself.

Now that you have considered your housing, the next step to tackle is to sign up for the company's automatic payroll savings plan. Ask the human resources department of where you work on how you can sign up for this. Ten to fifteen percent of your gross income is a good place to start. You need to have a healthy six month's of income in your savings account.

Next, you must cancel any luxury utilities. The alarm system, cable television, satellite television, internet, and cell phone plans must all go. This should give you an extra $300 plus per month to also toss into your savings account.

Ask your manager if you can surf the net after you finish work. As long as it's outside business hours and you aren't surfing anything illegal, they shouldn't have a problem if you want to send a few personal e-mails or download some recipes. The library also provides free internet access.

As for your working hours, now is the time to pick up any extra shifts. Work as much overtime as you can get. Work weekends and holidays. You need to add more funds to your nest egg. You can rest when you lose your job right?

Starting bringing your own lunches to work. Drink the company funded coffee and cheap tea. If you don't like it, start drinking water from the water cooler. It's good for you!

When any magazine subscriptions come up, cancel them immediately. Tell your kids that you are no longer financing their extracurricular school activities. Suggest TV pizza parties with their friends. Preferably at their friends' houses. Their parents can pay for it. Tee hee.

Implement a zero spending policy at home. No one buys anything. Period. Start cooking up the food that has accumulated in the freezer. You know you end up throwing it out anyway, so why not use it and save money on groceries? Dig to the back of the medicine cabinet. Yep, use those stinky smelling shampoos and conditioners that you bought, used once, then tossed to the back because they were too flowery smelling. Now is the time to use that stuff up and not spend any money at the drug stores.

When you've reached a point where you have exhausted all groceries, then it's time to go to the grocery store to buy only what you need. If you have run out of fresh fruit, frozen fruit and canned fruit, then see what is on sale in the fresh produce isle that week. The same goes for veggies, carbs and meat, if you eat it. You must have a cupboard full of ingredients, so you don't need to buy junk food, you can make your own cakes and cookies at home. Besides home made is healthier for you. Baking won't have all those chemicals, fillers, and preservatives that they put into store bought cakes and cookies.

Do you have any gift cards? I always seem to have an accumulation of them in my drawer. Now is the time to use them to buy small gifts for birthday presents. Tell everyone that they only get small gifts this year. If you are invited to a party, give them a small gift like a bottle of wine or chocolates for a kid's party. Get your kids to make the cards.

We have touched on the basics but likely there are many areas of your life that you can cut back on. Go back to basics, reconnect with your family over board games and books and you won't even miss the things that don't really matter anymore.

If you do get laid off from your job this year, it won't come as such a shock, because you will already be prepared with a simpler financial plan. Enjoy your unpaid vacation with your family and you will be recharged to an even better career once the economy picks up again.