There’s never a bad time to get aggressive about laying a preparatory groundwork for the possibility of unemployment. However, considering the state of the economy recently, doing so is arguably more important than ever right now. That’s particularly true for those in employment situations they know, or suspect, are temporary.
Considering the following steps as a parachute for those that may have to jump or a safety net for those that know they’ll have to.
Revisit and Revise Your Budget
Obviously the most practical difficulty resulting from job loss is the monetary hit. So the most practical step one can take to mitigate that loss is revisiting and revising their budget. A series of articles could be written on that topic alone, but there are some broad strokes.
Basically, it involves looking over your budget (if you don’t have one, create one!) and deciding what’s essential, what can be cut, etc. For instance, how much can be saved if you (the “you” here applies to anyone covered by your budget) replace eating in restaurants with bag lunches?
Consider your budget in terms of the money you have at the moment, too. If there’s a possible monetary dry spell looming in the near-ish future, transferring funds from the budgetary luxuries to debts, especially high-interest debts, is pretty much always a good idea.
Any not-entirely-essential major purchase being considered should probably be tabled for the time being too. And consider other purchases in terms of “What should I buy now in case can’t buy it later?” It might not be a bad idea to stock up on the dry goods and make other buying decisions. For a number of reasons, giving this revised budget a test drive before it’s necessary to do so is an excellent plan.
Establish or Pad an Emergency Fund
This one’s pretty self-explanatory. The experts generally advocate for an emergency backup reserve that will support basic needs for either six or eight months. I know that this stuff is easier said than done, but buckling down to shave a budget and/or sock some emergency cash away is really going to make life easier during a period of unemployment.
Get the Ball Rolling on Unemployment Benefits
This is another seemingly self-explanatory one. If there’s a certain or pretty certain surfeit of work coming down the pipe, kick that unemployment filing into high gear. That gap between your last paycheck and your first unemployment payment… it’s one not-having-a-job sacrifice you’ll be happy to make.
Consider Supplemental Unemployment Insurance
This is one less commonly suggested by those earlier-mentioned experts, but supplemental unemployment insurance is actually a thing and a good idea- especially if an unemployment event seems inevitable. Generally supplemental unemployment providers agree to make up the difference between the unemployment benefits being paid by the state and 50% of one’s previous paycheck amount.
The Next-Job Process
There’s a cliché that the best time to look for a new job is while employed. Fortunately, this is far too sophisticated an article to begin deferring to clichés. Although… it’s a cliché that happens to be true. However, the word “process” is used because this job search should involve more than a perusal of the want ads and a weekend and evening filling out of job applications (not that it’s a bad idea to do that stuff). The job search process should also incorporate some targeted networking, updating your resume with more recent experience, general job research, etc.
Look Into Developing New Skills for Increased Marketability
This is definitely a situational suggestion because obviously not everyone is in a position to start taking night classes or attending symposiums on their area of expertise (or hopeful area of expertise). However, if it’s something you can do, you should because according to the people who study this sort of thing, extra training is always a marketable asset.
Part-Timing and Freelancing
There’s a job-search disconnect sometimes that compels people to eschew part-time or freelance work during the lead up to a possible unemployment, or unemployment itself, in favor of focusing entirely on the full-time work search. An effective job search can virtually always be managed while working part-time. And the extra income can really help.
Talk to the People You Pay
There’s too much possible-unemployment-miscellany to cover here but a few biggies bear mentioning. For instance, despite the inevitable, unceasing seeming ruthlessness of everyone you receive bills from- the one’s who’ll kill your power and, far worse, shut off your internet if you don’t pay up- the utilities providers can actually be pretty reasonable folks. Talking with them is the key. If you let those you owe that you may be encountering some financial bumps ahead, they’re often surprisingly willing to work with you.
Frank McCourt is an investment, frugal living, and anything-else-financial blogger. When pried away from his laptop, Frank enjoys fishing and hiking with his wife across the northwest.