Worried About a Job Cut?

Whether you are a federal worker or are within the general corporate or business world, you may be worried about a job loss.  The anxiety around the topic is high!

So, what can you do?

1. Review your budget. If you don’t have one, do your best to create a rough version.
2. Look at your expenses and separate them into Needs and Wants. Needs are items you cannot do without (housing, food, electricity), and Wants are items you have flexibility with (gym membership, streaming services).
3. Does your job cut or layoff come with any severance pay? How will that positively affect your budget?
4. What would your family or household income be after a job loss? Does this create a budget shortfall?
5. Review your prospects for replacing part or all of your income.
6. Review your emergency reserves. Do you have funds available for three, six or nine months?

Once you have reviewed all of this, you now have the basics to start making decisions.  For some of you, there may be a need to shut down every expense possible to make sure you can cover the Needs (items that are necessities).  For others, you may have more flexibility and can build a phased plan of action.

A phased plan may entail a variety of strategies.  First, you may use severance pay or some of your emergency reserves for a brief period, believing you can find another job quickly.  If a new job begins to become less likely, you can immediately initiate additional cost-cutting measures.  When reviewing cost cuts, you might be less aggressive initially if you have more flexibility, and then if the time period drags on, you may need to be more aggressive.

It can be a stressful time when the prospects of a job loss exist.  Some find it liberating to stay ahead of the process and cut costs early to give themselves greater peace of mind.

When cost cutting, there are many areas to consider. A few examples include:

1) Can you put off buying a new car?

2) Can a vacation be delayed or canceled?

3) Can you cancel any memberships or subscriptions?

4) Can you prepare more meals at home?

As you navigate this process, look at it as an opportunity to have an emergency plan in place that reduces stress and anxiety.  This will help you meet your financial needs and generally give you the confidence to know how you will be able to get through a difficult time.

Your financial advisor can be an integral part of this process.  Don’t hesitate to reach out and get their help, even if only as a sounding board.

All the best to each of you.