Prepare Financially If Facing Job Loss
There’s no denying these are stressful times. In addition to worrying about contracting COVID-19, many people are losing sleep worrying about the economic uncertainty we are going through. Millions have lost their jobs, and many aren’t sure if their job is safe. If you are worried you may lose yours, take a deep breath. Don’t obsess about all the things that you cannot change or influence—focus instead on the things you can change.
If you have a job, prepare for what might happen. When you’re prepared, you’ll feel a lot better and in control of some things in your life. Preparation is the backbone of money management. The potential for a layoff is a wake up call for anyone who has not been paying attention to the basics.
Break It Down
If you haven’t already, turn your energy to these tasks:
- If you have unsecured debt—credit card bills—pay it off so you can stop paying high interest fees.
- Stop using credit cards unless you must, or unless you already pay the balance in full every month.
- Pay all bills a little early so you don’t end up paying penalties, pay late fees, and have your interest rate increased.
- If you usually receive a tax refund, go to your payroll department and resubmit a withholding form so that you get more money in each paycheck. Put the extra cash into paying off bills and building your emergency fund.
- Speaking of your emergency fund, build it up so you have enough to cover at least three months’ expenses. Ideally, try to save enough to cover six months of expenses to give yourself a solid safety net.
- Use direct deposit for your paycheck and then set up automatic transfers so money is automatically moved from your checking into your savings account. This makes saving so much easier.
- Automate anything you can by using online or mobile bill pay and reminders. This will help you make consistent progress on financial goals, and help you avoid late fees.
- Refinance your mortgage or car loans to take advantage of lower rates, if you qualify. Talk to a credit union loan officer about options to reduce your debt load or retire debts faster.
The more of these habits you develop, the more you’ll ease your anxiety about a potential job loss. Even if you keep your job, you’ll never be sorry you traded your bad old habits for productive new ones.
And if you do lose your job? The people at AMOCO are among your best resources if you become jobless. Contact us to see how we can help.
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