How to Prepare for a Potential Layoff

February 22, 2023

I recently spoke to a friend who was scared of getting laid off. She asked me how she could prepare for a layoff. The following was the guidance I gave her:

 

Stop paying extra on debts and start stockpiling cash.

 

I know this may sound counter-intuitive to many people, but if you are facing a layoff, you need as much cash to live on as possible while you look for work, especially if you have less than three months of expenses saved. Consider paying your credit card debt minimum and funneling as much cash as possible to a savings account. Also, consider earmarking any tax refunds to savings.

 

Review the budget and trim the fat.

 

This fat can be a cable or cell phone package with all the bells and whistles. You can ask for a cheaper cable plan or cut the cable cord altogether. You can choose a more affordable cell phone carrier or cancel a rarely-used subscription.

 

Contact creditors in advance to let them know of a potential layoff.

 

If you talk to your creditors before there is a problem, they can be more willing to work with you. Then, take full advantage of your potential layoff and ask your creditors for a reduced interest rate.

 

Review workplace benefits.

 

If you have accrued vacation or sick leave, ask if your company will pay you for unused time if you leave involuntarily. Have you had your annual checkup or been putting off dental work? Now is the time to take care of all your medical needs. See which benefits such as life insurance, long-term care insurance, and even some legal benefits are portable, meaning you can continue them after you separate from service.

If you have outstanding 401(k) plan loans, ask your plan provider how they handle loans during a layoff. Some companies will give you a short period to pay it back, and then the remaining balance counts as taxable income with a potential 10% penalty if you are under 59 ½. Other companies allow you to continue to pay your loan balance from your checking or savings account. In addition, medical saving plans such as HSAs can go with you, and you can use the funds for healthcare premiums while receiving unemployment benefits.

 

The key is to prepare in advance. If you are laid off, you have done the legwork to be financially prepared. If the layoff does not happen, you have built up savings and are in a great position to start re-attacking debt.

 

Is Your Credit Score Hurting Your Job Prospects?

May 17, 2013

One of my friends sent me this article about credit scores impacting a job search to ask my opinion. And, he confided in me that this is probably a part of the reason that his wife has been unable to find work for nearly two years and has just about given up on her quest to find another job. This is a very troubling trend in the workplace and all too often good people are being denied the opportunity to work in this dreadful economy that just hasn’t produced robust job growth.     Continue reading “Is Your Credit Score Hurting Your Job Prospects?”

5 Ways to Find Employment in a Down Economy

August 29, 2012

While the economy may be slowly recovering, the unemployment rate remains high, consumer spending is down, and a double-dip recession is a definite possibility. If you’re looking for employment in this environment, you may feel as if your hands are tied. However, that’s just not true. There are, in fact, a variety of effective strategies you can use to find employment in a down economy. Here are some tips to get you started: Continue reading “5 Ways to Find Employment in a Down Economy”

Boomerang Kids: How to Avoid Getting Financially Whacked When Your Adult Child Returns Home

June 20, 2012

It’s been said that a parent’s greatest gifts to a child are roots and wings. But what happens when a child must return to his roots because he cannot fly? This is the situation faced by many parents today: their adult children are moving back home, unable to find jobs or to afford life on their own. Continue reading “Boomerang Kids: How to Avoid Getting Financially Whacked When Your Adult Child Returns Home”

Six Steps to Follow to Help Improve Your Credit Score

April 22, 2011

With the American economy still not firing on all cylinders, unemployment at very high levels (the rate only seems to come down when people have received the maximum number of weeks’ payments and fall out of the workforce altogether), and no sure signs of economic recovery imminent, it doesn’t surprise me that one of the topics that I talk about with people on a very regular basis is how to rebuild credit scores after a period of unemployment and falling significantly behind on debt obligations.  I don’t have any data to support this, but it seems like the average credit score of all Americans has probably dropped 100 points or more in the last several years.  (I think I just found a weekend research project for myself.  Yep, I just might need a hobby.) Continue reading “Six Steps to Follow to Help Improve Your Credit Score”