Your position at work might not be as secure as you think it is. Because of that, we’re going to help you prep for a job layoff. Now, my hope and prayer is that you never have to experience this. But we’d rather have you be prepared for it and it never happens than have it happen and you not be prepared at all. The job layoff survival tips listed here came from two places:
- Our own experience with losing a job
- A post a blogging pal (who no longer blogs 🙁 ) wrote here
So get your pen and paper out and make yourself a plan that will help ensure that if you do experience a job layoff you’ll be prepped and ready to handle it.
Our Job Layoff Survival Story and How We Screwed it Up Big Time
So, back in the day (2010) when the kids were teeny and my only job was making it through the day in one piece (four kids under 10) Rick was our sole income provider. The company he worked for was slowly heading toward business bankruptcy. The CEO at the time was spending lavishly on himself and upper management all while sales numbers were going down the tubes and the regular joes and janes were doing all of the work.
We figured that the layoffs would eventually come, but we did nothing to prepare. Zero. Nada.
We watched as others in the company were laid off one by one, and then the phone call came. “Got my pink slip,” said the voice on the other side of the phone.
We were lucky: Rick got several weeks of severance pay and some vacation pay on top of that. Then unemployment kicked in. Rick got laid off in February and worked like a dog to find another job, but he didn’t start working until 7 months later. And the job he got, although it was a great opportunity, paid 25% less of what he was making at his old job.
In our “brilliance” (this was before our personal finance awakening, obviously) we decided that we would survive off of credit cards while he worked his way up to his former salary. No talk of cutting expenses or budgeting; we were certain our money would just find a way to work itself out.
Soon we were looking at double digit credit card debt and a 65% debt-to-income ratio. Now we’re working ourselves out of that mess, and it’s been no easy journey.
So this post comes out of a deep place in my heart; a place that wants to help others avoid our mess and be prepared ahead of time. Learn from our mistakes, friends, and avoid making your own. Life is much easier that way.
Here are my four suggested steps for prepping to survive a job layoff.
Develop Multiple Streams of Income
The first thing you want to do to survive an impending job layoff is to start developing multiple streams of income. Having several streams of income will help ensure you’ve at least got some money coming in if your primary income source goes away. Here are some second income ideas.
Get a Second Job
This can be a job at a place you might like working at or an online job such as a virtual assistant, freelance writer, graphic designer or a host of other second job ideas – anything from delivering pizzas to cleaning business offices to driving for Uber. Pick something that you’d at least semi-enjoy doing. And don’t worry about putting in too many hours at this point, just get your foot in the door because you can always step up the number of hours you work later on.
Start a Blog
If you love to write and to help others, consider starting a blog. Start now, because it can take a few months before your blog gets on the radar of others and starts producing an income. This post will show you how to start your own blog in four super easy steps and get on the road to making some cash. We’re currently making well over $1,000 a month from blogging through advertising and various other resources.
Invest in Dividend Paying Index Funds
If you’ve got a few grand in extra cash laying around, consider investing it in dividend paying index funds. Vanguard is a popular choice for investors. Know though that you’ll need a pretty good chunk of change invested to make a livable amount of money off of dividend income, but that every little bit adds up. Make monthly contributions to your dividend index fund to keep it growing.
Start a Business
Take a skill that you have and turn it into a business. Some ideas:
- Computer repair or set up
- Pet/Kid sitting
- House cleaning
- Handyman services
- Yard cleanup/maintenance
- Selling crafts on Etsy or designs on Redbubble
- Tutor students
Make a list of your skills and figure out how you can use them to provide for a need and make cash in the process.
Again, how much you make at each individual stream of income might now be much, but all of it together will add up to extra money you’ll have coming in that will help you to reach financial goals now and survive later if you’re laid off from your job.
Recommended Reading in This Area
Create a Six-Month Stockpile
In this post, Lance shared how three of the families in his neighborhood experienced job layoffs in one two-month period. Because they all had a six-month supply of food, beverages, toiletries and pet supplies, their stress levels were MUCH lower than what I’m sure a lot of their laid-off co-workers experienced.
You see, when you realize that you don’t have to spend money on food and toiletries for six whole months, the job layoff scenario just got a whole lot easier to stomach. It means that your monthly output of cash just got much smaller, and it means that for sure you won’t starve.
For details on how to create a smart six-month stockpile for your family, read these posts:
With the question of “How will I feed/care for your family” out of the way, a job layoff will be much easier to stomach.
Build a Decent Emergency Fund
Do you have an emergency fund? If not, what’s stopping you. An emergency fund that contains six to twelve months’ worth of expenses for your family will give you an abundant peace of mind at all times. And it will be a huge blessing if you’re ever laid off from your job.
Having trouble saving money for an emergency fund? Check out these 27 Ways to Save Money Right Now. Follow the tips and you’ll suddenly have oodles of extra cash each month that can go toward building up your emergency fund.
Make a Bare Bones Budget
You are budgeting each month, right? If not, start TODAY. Then take that budget and see how you can whittle it down to what we like to call a “bare bones budget”. In other words, how small could you make your budget if you cut every single thing out that wasn’t a necessity.
If you have your bare bones budget worksheet created ahead of time, you’ll know exactly which expenses you need to cut should a job layoff come your way. Make your bare bones budget now, while you’re thinking clearly, and outline the steps needed to take (complete with phone numbers) to trim your budget to the bone, such as calling to cancel cable, calling to cut your phone plan to the lowest option (or switching to Republic Wireless) or calling to cancel magazine subscriptions or your gym membership.
If you’re prepared ahead of time to do these things it’ll go much smoother when it’s time to get them done.
If You’re Already Laid Off
I realize some of you who might be reading this are already in the midst of a job layoff. If so, don’t do what we did and live in blissful ignorance. Instead, follow these tips.
Start Living On a Bare Bones Budget Now
Yup, cut everything that doesn’t absolutely need to stay in your budget.
Work to Find Side Hustle Jobs
Check Craigslist or online job sites such as Upwork for gigs or permanent positions.
Seek Out Charitable Organizations
If you’re really struggling, there are many, many charitable organizations that provide food for the needy. Check at local churches and local food shelves to help you find resources.
Start Selling Stuff
If you’ve got stuff lying around that you no longer use or don’t want, sell it via a Facebook group or Craigslist. Search your house and start getting rid of stuff to bring in extra money until you’re working again.
Don’t Give Up
Job layoffs suck big time. But they’re not the end of the world. Focus on what you do have (family, health, a place to live, etc.) and don’t let fear get you down.
Being prepared means you have a plan for any of the many troubles that life can throw your way. A job layoff is one of those troubles. No matter how secure you think your job is, it’s important to have a plan put in place for how you’ll survive if the employment rug is ripped out from under you.
Have you ever experienced a job layoff? What tips best helped you to weather it?