How to Prepare for a Layoff

Even if your job is secure, and it doesn't seem likely that you'll be laid off or otherwise suffer a job loss, it's always smart to prepare for the possibility anyway. You can't control the economy or your employer's decisions, but you can control how you prepare for any type of future possibility concerning your employment.

Start by creating a financial cushion. If you lose your job, you will then be able to live in comfort and pay your bills while you look for a new one. It can take a lot of time, and some sacrifice, to build up a descent amount of money for a cushion that may need to last for several months while you look for work. But if you ever get laid off or lose your job for some other reason, you will be happy you have something to fall back on.

You can start by saving a certain amount from your paycheck each month, the more you can save, the better. Save up until you have enough for several months worth of living expenses, and then keep your hands off that money. That will be your emergency fund. Don't use it unless you absolutely have to.

It's also a good idea to stay debt free. Some debts you cant really help, like a mortgage or school loans, but you can aim to keep credit card and other unnecessary debt down to a minimum. If you're drowning in debt, it's possible you need to look into professional debt consolidation, or other type of debt assistance.

Another way to prepare for a layoff is to keep your resume current. If you don't have a resume, now is a good time to create one. You can easily look online, or go to the library to look for information on writing a great resume.

Don't put all of your eggs in one basket. You can gain financial and mental security if you have more than one source of income. You can consider options such as a small business on the side, various stock market investments, or buying a house to rent out. It's ideal to have several streams of income to fall back on if you ever run into employment difficulties.