Surviving a Layoff
February 23, 2009, 9:45 am
5 tips and information for coping with sudden unemployment or underemployment
At Springboard, the clients we counsel are seeking help, information and tips with their credit card debt for a wide variety of reasons. Divorce, medical expenses, and overspending are common problems, but sudden unemployment and sudden reduction in employment are on the rise. 598,000 job were eliminated in January, the highest figure in 35 years. The national unemployment rate is now at 7.6%. Many metropolitan areas are reporting that 1 in 10 of the workforce is now unemployed, and an additional population of the workforce have suffered a reduction to a 30 hour work week from a previous 40 hour work week.
With the national economy in turmoil, everyone should take time to think about how they would cope with the loss or reduction in their salary. Here are 5 tips for dealing with and surviving an unplanned income change in your household.
1. Prepare yourself
Many workers may have a good idea that a layoff or reduction in hours is imminent. If your employer is in financial trouble and there is talk of downsizing or layoffs, you should be proactive.
Start while you are still employed with updating your resume, and only do it at home, not at work! Stay involved in professional groups (or join new ones) and stay connected with those in your field of interest. There is no need to discuss you may be job hunting in the future. Volunteer, take classes, post intelligent and positive contributions to industry-related blogs (be careful to avoid spelling and grammar errors). It will be easier to ask someone you know for a job lead if that ever becomes necessary.
Next take advantage of the benefits you have while they're still available to you. Get medical and dental checkups while you're still covered by your employer's health care plan.
It's also a good idea to go on a strict budget. Aggressively cut your spending and save as much money as possible to survive a period of lost income. At Springboard, we recommend that everyone have three month's income saved as an emergency reserve. If you don't have that much set aside, start working toward that goal immediately, saving as much as you possibly can.
2. Face the layoff
If and when the layoff comes, you might be angry or depressed. That's natural, but you can't afford to indulge such feelings for long. Your next moves are important, and any time you spend feeling angry or sulking is time you won't ever get back. Meanwhile, your savings and benefits will start to dwindle, so the faster you can adjust your outlook, the easier it will be to cope with a period of unemployment.
Keep up good relations with your co-workers and employer. They may be able to hire you back at some point, and you don't want to burn any bridges. Also, someone may be aware of job opportunities and may want to help you transition to a new situation.
If you handle your layoff with optimism and maturity, you will send a signal to your supervisors and co-workers that you were a valuable asset, and they'll want to hire you back as soon as possible. A positive attitude is also a big advantage when entering the next crucial stage: job hunting.
3. Start your job search right
Take time to prepare the best possible job search package you can. Work on making your resume as attractive and professional as possible.
See if you can get positive letters of recommendation from your former employer. If you handled the layoff right, they will be more than happy to do what they can for you.
Treat searching for a new employment like it's a full-time job. Spend at least 8 hours every day looking for work, filling out applications, interviewing, or improving your resume.
Take good care of yourself during this time; eat right and exercise regularly. You need to stay healthy to avoid unwanted medical expenses and to be ready and able to accept any job offers that come in. Exercise will also help you relieve some of the tension that comes with your situation.
4. Get back to work
Being unemployed during a recession means you can't afford to be picky. Any job that will help you get through a crisis should be acceptable. You may end up in a job you don't like, but you should give it your full effort and enthusiasm. You may find that your new employer has better positions you can move into after you prove yourself.
Of course, you can keep looking for a better job while you work at a new one, but until some kind of economic recovery kicks in, no job should be beneath your consideration.
5. Learn from this experience
By now you will definitely know how important it is to create a budget, live within your means, and build up an emergency savings fund. Make sure you have money set aside in case you face this kind of situation again in the future, and don't touch it unless you're in a bona fide emergency.
There's no substitute for being well prepared for a financial crisis. If you find yourself suddenly unemployed and haven't been diligently saving for just such an occurrence, then you'll have extra work to do. Start by destroying your credit cards, then work to create a livable budget.
To develop a crisis budget see our free educational materials "The Power of Paycheck Planning" and "How Am I Going To Pay My Bills?" These materials and more are available at our web site at no charge.
If your financial situation looks troubled, be sure to seek help if you need it. At Springboard Nonprofit Consumer Credit Management, we're always a phone call away.
Complete our household budget worksheet. The worksheet will help us recommend a solution to reduce your credit debt.
