Protect your financial fortress prior to losing your job

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By: Good Nelly
on 26th Jan,2012

Loss of job is a growing concern amongst the masses.
Protect your financial fortress prior to losing your job

Loss of job is a growing concern amongst the masses. The burning example is the US postal service where nearly 120,000 workers are expected to lose their job in 2012. It will never be easy to lose your job. However, if you get an indication that your service will not be required in the company, then at least you can take some steps to secure your financial future. In short, you can try to minimize the impact of the financial blow that comes with job loss. Read along to know about some tips that may help you to be financially prepared in case the termination letter is given to you.  

Be financially strong before you lose your precious job 

Check out the following tips that may assist you to safeguard your financial fortress before receiving the release letter

1. Stop making extra payments: You must have heard about the benefits of making extra payments on debts by now. Perhaps, you're making additional payments on your bills to reduce the debt burden. However, when your job is at stake, you can stop paying more than the minimum amount on the debts.

At this time, your goal is to have some spare cash in hand. Make minimum monthly payments till your job condition stabilizes. You can use the money to meet the regular expenses. This will give you more time to find a suitable job. 

2. Get a second job: Look for a second job before getting laid off. This will help to boost your emergency fund. If you really lose your job, then at least you'll have a source of income. However, check if your unemployment benefits will be affected due to the part time job.

The extra dollars you earn from teaching students, selling home-made goods, repairing computers, writing web articles, selling photographs, etc. can make you less dependent upon your primary job. In bad times, the part-time job will help you keep the financial boat afloat. 

3. Refinance your home loan:
If you have equity in your home and have enough credit score to qualify for refinancing, then don't hesitate to go for it. Refinancing will help to lower your expenses and free up some cash. Apply for refinancing before you lose your job. Lenders will not approve your application when they see that you don't have a job.

4. Spend cautiously: Keep track of every dollar and cent you spend everyday. Check your savings account and calculate the available funds. Don't forget that you'll have to run the family with the available funds if the dreaded termination letter is given to you. So your goal will be to maintain this cash-reserve by any means, and for that you'll have follow a shoe-string budget.

Use the DebtCC Personal Budgeting Application to track your income and expenses. If you're an Android user, then you can download the application and start planning your finances in a better way. Stop spending money on stuffs that you don't require. Take all steps that will help you preserve your cash-reserve.

5. Make a career move: If your future in the present industry is bleak, then it is time to move to another industry or location. You can shift to an industry where there is job security. Otherwise, you can move to a place where there are ample of job opportunities. The key point is to have a plan B because the plan A can fail anytime.

Lastly, if you have employer sponsored health insurance, then you may lose the medical benefits after saying ‘good bye' to your job. Start collecting information on COBRA from now onwards. Go for medical check ups to know about the condition of your health. Plan your health care and career before it is too late.

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